International Bank L 1 for Reconstruction and DevelopmentVOL. 9 VO 9V Preliminary Paper No. 9 FILE° for the Working Party on the Polish Loan Application Industrial Rehabilitation in Poland Issued by: Eastern European Division Loan Department June 3, 1947 ACKNOWTLEDGMENT The study which follows was prepared by the Division of Operational Analysis, UNRRA Mission, Warsaw, in collaboration with the Division of Industrial Rehabilitation of the Mission and various agencies of the Polish Government. The report, based upon a paper on the same subject originally issued by the European Regional Office of UNRRA in London, is presented here because it is believed to give the most impartial S and complete account of industrial rehabilitation in Poland currently available. CONTENTS I INTRODUCTION . . . . . . . . . . . . . . . . . . Destruction of Equipment and Plant . . . . . Effects of Territorial Changes . . . . . . 8 The New Industrial Organization. . . . . . 14 II PROGRESS OF REIHABILITATION . . . . . . . . . . . 20 The First Phase. . . . . . . . . . . . . . 21 Obstacles to Further Progress. . . . . . . 24 III THE FOUR YEAR PLAN 1946 - 1949 . . . . . . . . . 27 Production. .... ... 27 Employment . . . . . . . . . . . . . . . . 30 Feasibility of the Plan. . . . . . . . . . 37 IV CONDITION OF SOME BASIC INDUSTRIES . . . . . . . 44 Coal . . . . . . . . . . . . . . . . . . . 45 Coke Ovens . .52 Oil and Natural Gas. 53 Oil . . . . . . . . . . . . . . . . . 53 Natural Gas . . . .. . . . . , . . . 56 Iron and Steel . . . . . . . . . . . . . . 59 Iron Ore and Scrap Iron . . . . . . . 59 Pig Iron and Steel. . . . . . . . . . 62 Ferro-Alloys and Non-Ferrous Metals. . . . 68 Ferro-Alloys. . . . . . . . . . . . . 68 Nickel ......... . 69 Copper.. . . .. . . . 69 Tin . . . . .... . . . . . . . . . 70 Lead and Zinc . . . . . . . . . . . . 71 Engineering. . . . . . . . . . . . . . . . 73 -_Rubber . . . . . . . . . . . . . . . . . . 76 Chemicals. . . . . . . . . . . . . . . . . 80 Textiles . . . . . . . . . . . . . . . . 88 Prewar Production . . . . . . . . . 88 War Losses. . . . . . . . . . . . . . 89 Present Potential . . ,. . . . . 91 Nationalization and Future Plans. 941 Construction Industry. . . . . . . . . . . 98 V UNRFA AS$ISTANCE . . . . . . . . . . . . . . . . 100 UNERA Program of Assistance. . . . . . . . 101 Assistance in RaW Materials. . . . . . . . 105 Textiles and Footwear . . . . . . . . 105 Other Industries. . . . . . . . . . 106 Assistance in Equipment. . . . . . . . . 108 Machine Repair, .. . . . . . 109 Mining. . . . . . .. . . . . . . . . 110 Building and Construction . . . . . . 111 Public Utilities. . . . . . . . . . . 112 Processing. . . . . . . . . . . . . . 113 Technical Assistance . . . . . . . . , 113 APPENDICES APPENDIX I Important Plants and Industrial Equipment to be Constructed or Rebuilt 1946 - 1949. . . . 116 APPENDIX II Industrial Machinery and Equipment required from Overseas Sources . . . . . , 118 Textile Industry . . . . . . . . . . . . . . . . 118 Timber Industry . . . . . . . . . . . 118 Paper Industry . . . . . 118 Building Industry . . . 118 Leather Industry. . . . . . . . . . . . . . . . . 119 Chemical Industry . . . . . . . . . . . . . . . . 119 Smelting Industry . . . . . . . . . . . . . . . . 120 Engineering Indu~stry . . . . . . . .121 Electrical Industry . . . . . . . . . . . . . . . 123 Electric Power Supply . . . . . . . . . . . . . . 124 APPENDIX III Coal Mining Machinery and Equipment required from Overseas Sources . . . . . . . . 125 0 - 1 - I. INTRODUCTION The following report on Industrial Rehabilitation in Poland analyses progress which has been made to date in reIairing the damages of war, and the part which UNRRA has played in assist- ing rehabilitation. It also describes the present condition of Poland's industries, the immediate problems of further development and the need for further assistance from abroad. In order to appreciate fully the extent of the industrial problems involved, account must be taken of the special conditions which prevail in Poland. These conditions may be described under three headings. First, there are the results of six years of violent warfare; secondly, there are the far-reaching postwrar adjustments in Poland's frontiers, and, thirdly, there are the changes resulting from the new economic organization of the country. Destruction of Equipment and Plant * Poland was the first country to be overcome by Germany by force of arms and the last to be liberated. It vras swept by the tide of war several times, first during the German invasion in 1939, then during the German attack on the U.S.S.R. in 1941, and finally during the period of Soviet liberation from 1944 to the end of hostilities in 1945. The front line was, on many occasions, stabilized in Poland for long periods of time, and the country ras the scene of some of the most fiercely fought battles of the war, many of which were concentrated in industrial areas. These military operations resulted in the most widespread and complete destruction of industrial buildings, equipment, power installat- ions and workers' dwellings, and meant the virtual elimination of large sections of industrial activity. The wholesale destruction and dislocation of industrial capacity was intensified by the "scorched earth" policy pursued by the retreating Germans who, insofar as time would allow, destroyed as much productive capacity as possible by the removal of equipment and the physical destruc- tion of what could not be taken away. By the end of the war Warsaw and WrocXaw wrere almost entirely destroyed and large sec- tions of other industrial towns such as Poznan, Rzeszow, Radom and Bydgoszcz were badly damaged. The ports of Gdansk (Danzig) and Gdynia, through which Poland's overseas commerce must pass, were rendered unusable, and the country's internal communications system, particularly the railroads, was almost completely ruined. Industrial destruction, however, was not confined to that resulting from military operations. During their occupation the Germans used Polish industry as part of their war machine. They integrated it as far as possible with industry in the rest of Axis Europe, taking into account the manpower, raw material and transport situation in "Fortress Europe"' as a whole. This in- volved in many cases, deliberate closing down of sectors of Polish industry. Irn addition to all the more valuable types of machinery and equipment which were removed during their retreat, they removed as units to Germany, during the occupation, such 1/ For details of the damage done to the Polish transport system, the UNRRA program of Transport Rehabilitation in Poland and progress in rehabilitating transport to date, see: UNRRA European Regional Office, Transport Rehabilitation in Poland, Operational Analysis, Paper No. London 194L6. -3- important industrial plants as those of the firms of Stara->'-w-ce, Ostrowiec, Lilpop and Rau, the rifle factory at Radoin, Phi"' cable factory at Ozarow, the explosives factory at Pionki and the chemioal works at Moscice. The small though vital machine tool industry was destroyed almost in its entirety. Installatiorns and equipment which were not operating as part of the German ind.ust- rial plan, and which were not destroyed or removed, rere allowed to fall into a state of utter disrepair and deterioration. On the other side of the balance sheet, the Germans developed in- dustrial capacity in Upper Silesia where it was felt that industry was less vulnerable to allied bombing, but miuch of this capacity was seriously damaged or completely destroyed during the heavy fighting in this area in 1945 or removed as war booty by the U.S.S.R. before the area became part of Poland. Such Polish in- dustry as was operated during the war was operated solely with the object of winning the war within a few years, and emphasis was placed on maximizing output over a short period of time with com- plete disregard to the future. For example, the coal mines produced 400 million torns of coal in the five years 1940-1944, whereas in 1946, working on a normal basis, the output was only 47.2 million tons. The result of this ruthless exploitation was that. over the whole field of Polish industry, equipment was either seriously in need of repair or required major overhaul, and in many cases it was suitable only for the scrap heap. At the end of the war it was clear that the continuance of operations without large scale investment could only be achieved by most careful nursing of the equipment And the expenditure of an unduly large effort on repairs and maintenance. The Polish Government's estimates of war losses and damage indicate that material losses in the old territories within the present boundaries of Poland, amounted to 18.2 billion U.S. dollars. Of this total 5.7 billion was in industry, and 3.5 billion in transport and communications. These losses were equal to some 50 percent of the total industrial prewar capital value. In the recovered territories over 20 percent of the prewar indus- trial facilities and nearly all the facilities added during the war were destroyed or removed. The extent of war losses varies considerably from industry to industry; the machine tool industry suffered complete destruction and the metal industry about 90 per- cent; about 70 percent of the woolen textile industry was destroy- ed. This unequal destruction has caused many bottlenecks to re- habilitation of capacity. 68 percent of the Warsaw dwellings, representing 58 percent of the total value, have been damaged or destroyed and some 67 percent of the urban centers in the recovered territories has also been destroyed. The whole electric power system, including plants and distribution lines, suffered severe losses. In a number of cities and towns power stations were com- pletely destroyed, notably at Pruscow and Warsaw. Important in- dustrial power stations were destroyed such as those of the smelting works at Ostrowiec and Starachowice, the latter being also the source of power for the central industrial district of Polish Silesia. So far only 170 thousand kilowatts of electric energy are rehabilitated out of a prewar total of about 450 thousand. Some indication of the destruction of industry in Poland from all causes may he obtained from Table I which shows production levels in 1945 as a percentage of prewar production. This level of production, only eight percent of the prewar level, was achieved only after some months of effort to rebuild and w repair the industrial apparatus. After the end of the war, action was taken by the PolL Government in co-operation with the Soviet, British, United States and French authorities in occupied Germany and Austria, toward the recovering of that industrial and other equipment removed by the Germans which is considered vital for production and is extremely difficult to replace. Investigation in the occupied zones of Germany and Austria has led to the discovery and return of some of the equipment. Where the original equipment cannot be traced, similar equipment of comparable value is being selected to serve as compensation. Reports indicate that except in a few cases, very little recoverable equipment has reached Poland, and that, although useful, it has filled only a few of the many gaps in Poland's industrial structure. It is not expected that recovery of stolen equipment will assist materially during the next three years. It is important to realize that, since a part of Polish industry was equipped with machinery of German manufacture, and because German industry has been seriously damaged or destroyed, there are difficulties in obtaining replacements and spare parts to maintain German-manufactured plant in Poland. The fact that the spare parts cannot now be obtained in Germany has meant long delays in making spare parts to order and, in many cases, there is no alternative but to order completely new equipment abroad. To compensate the country for the damage which it has suffer- ed, Poland's claim to reparations was recognized in the Potsdam agreement of July 1945. It was agreed that Polish claims would be met from the Soviet quota, the exact percentage and details being left for direct negotiations between Poland and the U.S.S.R. As a result of these negotiations an agreement was made between -6- Poland and the U.S.S.R. providing for a Polish share of 15 percent of reparations from the Soviet zone of occupation and of i5 -;cr- cent of the share of the U.S.S.R. in the industrial reparations (both free of charge and in exchange) collected from Western Germany. No industrial equipment has so far been delivered to Ppland on account of her share in the reparations due to the Soviet Government in the W.estern zones-of occupation, but repara- tions, in the form of raw materials and capital equipment, are being supplied from the Soviet zone of occupation. - 7 - TABLE I Production Levels in Polish Industry Immediately After the Wlar Average Monthly Monthly Production in. 1945 Production (Postwar Boundai;crz) Item 1937 - 1938 Perc ent o ° (Prewar Boundaries) Production Prewar Index of Industrial Production 100 1/ 8 8 (April) Coal (million tons) 5.39 I/ 0.93 17 " Crude Oil (thousand tons) 11.4. German industry in Upper Silesia. Before the war, the Poli!.s population of 35 million people included about 8.7 million living in tow%ns. Today, out of 24 million only about 7.4 million are in towns, yet this smaller non-agricultural population has to provide the labor force for an industry which is half as great again as that before the war, and which is situated in areas denuded of Polish populationr It is clear, therefore, that in industry there is great need for the development, over the next five years, of modern methods of production economical of manpower. It is an urgent necessity that the heavy demands on manpower of repairs maintenance and improvisations, at present necessitated by the condition of industrial equipment, should be reduced to normal proportions. Unfortunately, although Polish industry will itself be able to modernize some of its equipment, it will he dependent, over a large range of industries, on the U.S. and U.K. for modern equipment. The New Industrial Organization On January 3rd, 1946, an enabling Act wras passed which provided the legal basis for the nationalization of three types of industries. The first category, identified by type of ovrnership, includes enterprises owned by Germany, the free State of Gdansk, or by the citizens of Germany or Gdansk, except those of Polish or other nationality persecuted by the Germans, and by all 1/ See Polish Government Official Journal No. 3 February 5, 1946. - 15 - companies controlled hy the above-mentioned organizations or individuals. These were nationalized without compensation. The second category, identified by type of industry, includes industrial and mining enterprises in the following fields: coal, oil and gas, synthetic oil, power, transportation, and communi- cations, some public utilities, armament and aircraft or explosive factories, sugar refineries and distilleries, breweries, yeast factories, flour and oil seed factories (the four last-named only if above a certain size) textile industries, and Drinting works. The third category, identified by size, includes factories, in the remaining branches of industry, in which full production involves the employment of over fifty employees in any one shift. This limit has now been raised to 100 employees, and in some industries to 200. The Council of Ministers may raise the limit in case of only slightly mechanized industries or for those of a pioneer or seasonal character. In the second and third categories nationalization was to be effected on a compensation basis. I\Tel.y established industries are exempt from nationalization even though productive capacity should grow beyond the limit mentioned for the third group. Enterprises owned by communities, co-opDeratives or co-operative associations are also exempt from nationalization. On the other hand, other enterprises, having naticnal importance but not covered by the act of January 3rd, 1946, may be nationalized on the basis of a resolution passed by the Council of Ministers, but only up to December 31st, 1946. State controlled industries are administered 'by the Ministry - 16 - of Industry or, if they are purely local in character, by the head of the province, the voivod. In accordance with Circular No. 255 dated May 28th, 19416J Polish industry has been organized into 14 central boards and a department of local industry. The 14 central boards are super- vised by four vice-ministers, of which the first is in charge of the coal, iron and steel, and electric power industries, the second administers liquid fuels, chemicals and the sugar industry, the third is responsible for the leather, timber, paper, textile industries and building materials and the fourth supervises the electric, ordnance and metal industries. Inl4nd transport and communications are administered by a separate Ministry, the Ministry of Communications. All of the above-mentioned industries are organized into 153 associations operating 3,138 State enter- prises as indicated below:- No. of No. of Industrial Industry Associations Establishments 1. Coal 15 114 2. Iron and Steel 3 113 3. Electric Power 12 101 4. Liquid Fuels 2 20X 5. Chemicals 10 223 6. Sugar 7 102 7. Leather 11 295 8. Timber 7 306 9. Paper 9 170 10. Textiles 35 1,009 11. Building Materials 19 303 12. Electrical 5 75 13. Ordnance 3 17 14. Metal 15 290 TOTAL 153 3,138 x Includes both mines and factories The above organization is further supplemented by seven de- partments in the Ministry of Industry, viz., the supply, personnel, planning, economic. technical inspection and local industry - 17 - departmenits. These are supervised by a fifth vice-minister. Recently the Council of Ministers authorized the delegation of the control and supervision of industry by the Industrial Central Boards to commercializedState enterprises charged with the administration of entire industrial branches. This is an attempt at decentralization designed to promote industrial prop. gress, and to lay the foundation for sound commercial operations. The Ministry of Industry has been authorized in this connection to create a newr department concerned with Finance, and to extend the Technical Department because it will be necessary to central- ize financial supervision and to increase the degree of technical management. The associations are organized on industry, or mixed industry and area, bases; for example, the textile industry has separate associations for woolens, cottons and silk, wNhile the coal indus- try has separate associations for groups of mines in different areas as well as a speoial association for the production of min- ing equipment. The associations make decisions on matters of industrial and commercial policy and report to their respective Central Administrations. The Central Administrations which draw up production and investment plans for individual industries in turn report to the Ministry of Industry. Associations of Enter- prises obtain raw material supplies, control production and report on progress; the management of each individual firm is responsible for the planning of its own production according to the instruc- tions of the Association. Many of the Central Administrations have their own selling and purchasing organizations. These state-owned or state-run enterprises which are not organized into associations are administered, on a local basis by - 18 - the voivoda which designate local industrialists to act as their agents. Smaller enterprises are under the administration of the district (powiat) offices. Enterprises in the fields of food and agriculture are the responsibility of the Ministries of Food, Trade, Agriculture or Forestry respectively. Commerce, all retail trade, the building industry, and handicrafts fall outside the scope of nationalization; moreover many industrial firms are too small to fall within the limits of the present nationalization legislation. The above organization is not final; it is being changed, in the light of experience, largely in the direction of placing the associations on a strict profit and loss basis, though they will retain their essential character as instruments of economic pianning. in principle new private enterprises are not limited by law to a fixed nu&nber of employees and can theoretically grow in the sa.r.e way aS in prewar years. A license must, however, be procured. Certain industrial and commercial activities have been reserved exclus vely for the Government sector. Taxes are higher for pri- vate enterpr:Ises, particularly the income tax. Some easement is anticipated wren, as recently announced, a new law is introduced releasing incomes up to 72 thousand zloty per year from taxation, making recjuctions for size of family in the case of taxpayers earning less that 240 thousand zloty, and completely abolishing the 80 percent supplemental tax collected on incomes above 400 thousand zloty per annum. The latter was, it is claimed, a heavy burden on most private enterprises. Furthermore, tax con- cessions are given to co-operatives, both large and small, to communal savings banks and to communal enterprises. - 19 - Procurement of raw materials for private enterprises must be effected through industrial chambers, associations or kindred organizations. These forward requisitions to the Ministry of Industry. Following careful analysis, requisitions for raw materials are then submitted to the Central Planning Board for final approval. There the quantities requested are again screened in conformity with supplies available and the priority of the product to be manufactured. Commodities manufactured by private enterprises are not subject to price restrictions irrespective of whether supplied to Government institutions or the free market. All Government enterprises obtain raw material at controlled prices excepting certain luxury categories, such as furs, for which commercial prices must be paid. Procurement procedure is the same as in the case of private enterprises. As concerned the marketing of products manufactured by State enterprises, these must be sold at manufacturing cost, allowing for depreciation of equipment but not for profit, to another State enterprise. All prices charged by $tate enterprises are subject to approval of the Price Committee. Products manufactured by State Enterprises and sold in the free market may be disposed of at prevailing prices but5 in this case, the difference between the manufacturing cost and the price obtained is transferred to the Approvisation fund, a fund for the financing of the food rationing system 1/. All State enterprises are subject to prevailing taxes but a lower scale of the income tax is applied. Other taxes, notably the turnover tax and communal taxes, are the same. State enter- 1/ See ITNRRA European Regional Office, Agriculture and Food in Poland, Operational Analysis Paper No. 'London, -19f6. - 20 - prises are obliged to transfer certain fixed amounts to the ->est- ment fund each month, but these payments are not of a tax natare as the amounts thus transferred are credited to a given enterorise and provide for replacement of buildings and equipment. Poland's postwar economy is clearly a combination of State and privately owned enterprise. The extent to vwhich the co1rlinry has been nationalized should not, however, be overestimated. About 60 percent of the occupied manpower is in agriculture, which is still run on the basis of private enterprise, about 20 percent is in private industry and trade, and only 20 percent is in the nationalized sector. Even by 1949, at the end of the Four Year Plan, only 25 percent will be in the nationalized sector and the numbers in private industry and trade will, by that date, also have expanded to 25 percent. Nevertheless, although private enterprise is still the rule in the handicrafts, building, small- scale industry, and retail trade, nationalization of the basic industries and the larger industrial enterprises has wrought fundamental changes in the general pattern of Poland's industrial economic life. II. PROGRESS OF REHABILITATION At the end of hostilities the Polish Government had to face the gigantic problem of repairing a disrupted transport system and a mutilated industrial apparatus. Not only was equipment and plant destroyed and damaged, but even that which was still in operation presented a continual problem of repair, overhaul and maintenance. Yet, owing to the large industrial capaoity, damaged and undamaged, now at the disposal of Poland, it was clear that, by the exercise of ingenuity and with hard work, considerable - 21 - working capacity could be created out of the chaos. The First Phase In its early stages progress of rehabilitation was relatively rapid; the return to effort was great. In many cases, the app- lication of effort to a bottleneck problem opened the way for large increases in production, Such was the case, for instance, in the rebuilding of railway bridges which, in many cases, resulted in the opening up of communications between areas formerly sep- arated by lengthy circuitous routes. There was, of course, a great shortage of raw materials since these had been exhausted by the Germans before their retreat, but bottlenecks in materials we-re gradually overcome and production recovered in 1945 at a rapid rate. One of the basic steps in industrial rehabilitation during 1945 and 10k6 wAas the rehabilitation of the communications system. This is d elsewxhere t but it must be stressed that, had It- no! reea for the strenuous efforts of the Polish Government, combined -w,ri-Bh the assistance of UNRRA in providing locomotives, rolling stock and motor vehicles, transport would have been an ever Dre3ernt bottleneck and it would have been impossible to effect rapid industrial recovery. Table ITI summarizes the development of industry since the conclusion of hostilities. This table shows how Polish industry rapidly recovered from the low level of activity which prevailed in April, 1945, when production was only eight percent of that in the same area before the wasr. Between April and October, 1945, production was multi- plied three-fold to reach 23.6 percent of the prewar level. Since October, 1945 progress has of necessity been slowed down, By 1/ See: UNRRA European Rezional Office, Transport and Rehabilita- tion in Poland, Operational Analysis raper No. o, London. - 22 - April5 1946 the level was four times that a year before and, 1hy the end of 1946, four-and a half times the April, 1945 level. In December industrial production was 77 percent of that in PQland before the war; if, hovwever, allowance is made for the larger industrial area now included in Poland, and a truer measure of the extent of rehabilitation thus obtained, production was only 35.4 percent of prewar. From the point of view of the standard of living of the Polish people, industrial output per capita is the appropriate index; this shows that, in December, 1946, output per capita was 112 percent of that in prewar Poland, due, of course, to the much larger industrial apparatus contained in the new boundaries and the fall of over 30 percent in the size of the population. individual industries started from different levels of activity according to the degree of destruction and dislocation, and the scope for exDansion therefore varied considerably. The crude oil, zinc, salt, gasoline and textile industries, for in- stance, have expanded less than industry generally. The most outstanding recoveries are in the coal mining and iron and steel which are the basic industries upon which recovery depended. - 23 - TABLE IV Industrial Production in Poland 1945 and 1946 1945 1946 Industry April October April October Dece:hber Index of Industrial Production a) Old Boundaries 1938 s 100 17 52 71 76 77 b) New Boundaries 1938 - 100 8 24 33 35 33 Coal 933 2,936 3,742 4,555 4,207 Coke 88 181 265 313 312 Crude Oil 9 9.50 9.30 10.3 10.3 Pig Iron 8.30 37,0 65.0 65.6 55.5 Steel 17.1 76.0 102.0 109.0 110.8 Raw Zinc 2.14 3.70 3.60 5.61 5.47 Raw Lead 0.31 0.65 0.71 0.86 0.85 Salt 17.9 16.8 14.6 27.1 27.1 Cement 27.5 54.0 92.0 147.0 109.7 Kerosene 0.82 1.40 1.20 2.59 2,22 Gasoline 2.09 2.90 2.78 4,33 2.98 Artificial Fertilizers 4.21 10.3 16.3 19.4 22.0 Sulphuric Acid 0.69 6.16 10,1 10.8 12.3 Machine Tools 25 58 108 104 136 Agricultural Implements 284 5,612 13,710 18,261 15,315 Loccxotives 7 10 12 17 14 Passenger Railroad Cars 0 0 0 0 0 Freight Railroad Cars 2 5 330 349 635 Cotton Yarn 0.51 2.59 3,72 4.95 4.37 .oolen 0.29 1.26 1.41 1.99 1.57 Rayon " - 0,07 0,24 0.35 0.36 Cotton Fabrics 0.56 1.91 3.20 3.90 2,88 ;Toolen " 0.10 0.73 1.11 1.69 1.40 Bast Fibre - 0.21 0.75 1.25 1.31 Cellulose 0.30 3.02 3.76 5.91 6.46 Paper Board 0.20 0.98 1.93 2.34 1.80 Paper 0.89 5.86 11.5 16.0 14.8 NOTE: All figures are expressed in thousands of tons, with the exoeption of the index numnbers of industrial production and output of the engineering industry, which is expressed in units. Source; IMinistry of Industry, TWfarsaw - 24- Obstacles to Further Progress This record of progress is impressive. It should not be overlooked, however, that the rate of progress is slowing down as the limit of improvisation and repair is reached. The index of production rose only from 71 to 78 between June and December, 1946, a rise of ten percent compared with 25 percent in the pre- ceding six months. In absolute terms the increase in production in the second six months of the year was only one-half of the in- crease in production in the first six months. Further substantial progress cannot be achieved without replacement of plant and equipment which have been destroyed. Moreover, in order to con- tinue at the present level of operation, it must be emphasized that extensive replaoements must be made of old equipment vhich wias pressed into service in order to obtain rapid expansion of output but which is now wearing out. During the war, as in every country, replacement was postponed as long as possible, and there is a backlog of five or six years normal replacement which ought really to be made up immediately before any replacement of war losses is undertaken. There are specific bottlenecks at present holding back Polish industry which cannot be eliminated without the assistance of imports from abroad. Whereas certain installations were completel: destroyed, other related plants were little damaged by the war and it was possible to put them in working order, although only by utilizing more or less obsolete equipment. As a result, there is an acute disproportion in the degree of rehabilitation in the various branches of industry and transport, and an urgent need to provide new matching installations. Unfortunately, Polish indus- try never produced much new capital equipment for its staple - 25 - industries itself and is, therefore, completely dependent on overseas sources for the bulk of the equipment required. Thus, ateel ingots could be produced at a rate which would enable an additional 300 thousand tons of rolled steel products to be manu- factured. However, the only way this can be achieved is to import new rolling mill capacity, and necessary equipment to rehalbilitate and modernize existing capacity from the United States at an expense of about 20 million dollars. Heavy machinery is needed also for the coal and oil mining industries; for example, lack of screening and washing plant in coal mines spoils the quality of the coal and lowers the efficiency of labor. The electrical, paper, leather and cotton textile industries require critical spare parts and machinery in order to approach capacity produc- tion. Furthermore, the technical laboratories and research inst- itutes need re-equipping with scientific instruments and tools, A severe bottleneck is also found in transportation and communica- tions. There are still nearly five thousand kilometers of dis- connected railway tracks, tem-porary bridges to be replaced on main lines, a shortage of rolling stock as well as of barges and tugs for the waterways, which cannot be replaced entirely from indigenous production in the present state of Polish industry. An extremely high proportion of Polish industry is equipped with obsolete and badly wrorn equipment of foreign manufacture. Spare parts are needed in exceptionally large quantities, yet these frequently cannot be obtained in the foreign country con- cerned. In such cases it is necessary, to keep the equipment in operation, to prepare drawings and tools to make the parts in Poland. The cost of maintaining the obsolete equipment is thus multiplied many times and, if foreign exchange were available, it - 26 - vwould be much more economical to scrap the machinery and replace it with modern machinery which is, of course, much more efficient and economical of manpower in operation. In many branches of industry the experts believe that it is necessary to scrap the obsolete plant and completely reconstruct the industry on modern lines using the most modern equipment, and that, through the saving in manpower, the investment would yield ample dividends within the next five or ten years. All the above considerations point to the need for importing modern equipment at the earliest possible moment, both as a means of b)reaking production bottlenecks and as a means of reducing CC3tS in Polish industry generally. Unfortunately, almost the only sources of such machinery are the U.S., Sweden and the U.K. It is, therefore, apparent that the further rehabilitation of Polish industry primarily depends upon her ability to procure and pay for capital equipment from these countries. Procurement difficulties are very great in the case of Sweden and the U.K.; the most promising source of supply is undoubtedly the United States where, after the expansion of capacity involved in building up her own industrial apparatus during the war, there is likely to be surplus capacity available for Polish orders. Poland's problem of financing imports are discussed elsewhere but it should be remarked here that the Polish Government is acutely en- gaged on plans to make investment by foreign enterprises both easy and attractive. Naturally, such investments as, for instance, the erection of a complete factory, vwould have to fit into the economic plan, but the Government is anxious to find means l/ See: UNRRA European Regional Office, Foreign Trade in Poland, Operational Analysis Paper No. 7, London, 1947. - 27 - whereby the initial investment and development would be in tlle nature of free commercial enterprise by the foreign investor on a profitable basis. The Government is willing to grant foreign investors consid- erable privileges and also to guarantee rates of profit. The Government feels that the internal political situation has now been stabilized and that the country can look forward to a period of uninterrupted economic development, providing a favorable en- vironment for foreign investment. III. THE FOUR YEAR PLAN 1946/49 Production The Polish Government has prepared a comprehensive economic plan for the four years 1946 to 1949, designed to develop the economy at maximum speed. The first objective of the plan is to restore agricultural production as rapidly as possible, and the second to restore Polish industry, including that taken over from Germany, as far as possible to prewar levels of production. In this sense it represents merely a rehabilitation plan. Thus, by the end of 1949, agricultural production will be only 80 percent of the prewar production in the area within the present boundaries of Poland, mainly on account of the slow speed at which the live- stock population can be rebuilt. In the case of industry the plan aims at rehabilitating the industriep which were in the present boundaries of Poland before the wrtar, but, here again, industrial production will reach only 70 percent of the prewar level by 1949. It does not envisage any appreciable extension of indust- rial capacity, as may be seen by an examination of Appendix I, which gives a list of the most important industrial plants to be - 28 - constructed during the plan. As a result of the plan indns'-;rial production in the year 1949 will be 52 percent greater than in the prewiar Poland and 228 percent of the output within present boundaries in 1946. It is important to realize that the economic plan depends upon imports from abroad in excess of those which can be paid for by Poland's exports. In the three years 1947 to 1949, the grand total of required imports is $1,950 million (of which only $169 million represents imports for direct consumption), while Poland's exports in the same period amount to only $1,183 million, $830. million of wihich represents coal exports, leaving a balance to be covered by relief or loans of $767 million. The importance of imports in the rehabilitation of Poland lies in the fact that they provide so much of the investment required. The total in- vestment required in the three years 1947 to 1949 is $3,150 million, of which 24 percent must be financed by imports not paid for by Poland's exports. About $870 million of the total imports represent capital equipment for industry and, as food and raw materials obviously take precedence, these investment imports wrould be sacrificed in so far as the deficit of $767 million is not covered by outside assistance. Production, and therefore investment from her own resources, in the last two years of the plan, being marginal, depend, of course, to a very large extent upon fulfillment of the plan in 1947. It must, therefore, be emphasized that the realization of the plan, particularly in the years 1948 and 1949, depends very largely upon Poland receiving all the external assistance required including $110 million of essential capital equipment for industry in 1947. Poland's prewar national income was $5.5 billion mid-1946 - 29 - dollars. In 1946, owing to the destruction of industry and eff- iculties in resuming agricultural production, the national income is only half as great, namely $2.7 billion. If the plan is realized the national income will increase to a level of $6.5 billion in 1949. Over the whole four years the investments will amount to $3.7 billion, $3.15 billion of wNhich will he re- quired in the last three years. Investments from her own income will be approximately 20 percent of the national income in each year with a peak of 22.4 percent in 1947. The contribution of industrial production to the total nat- ional product has been increased as a result of territorial changes. Before the war it contributed some 32 percent, but in 1946 it has contributed 40 percent and will maintain this percent- age throughout the plan. The development of production over the four years in industry as a whole and according to industries is given in table IV. It should be pointed out that the discussion above relates to total industrial production and does not take into account the 0 fact that the population of Poland is now only 24 millions, com- pared with 35 millions before the war. There is no doubt that, if the plan can be fulfilled, the national income per head will rise by the end of 1947 above prewar levels. If the investment program, and in particular the foreign loans implied therein, are realized, the national income per head in 1948 will be 32 percent above prewar and in 1949 will be 63 percent above prewar. This is due almost entirely to the increase in the non-agricultural income per head. W7hereas agricultural output per head will be only 12 percent higher than prewar, industrial production per head in 1949 will be 112 percent above prewar levels, and the outpuit of - 30 - commerce, trade, transport, communications, etc., will be 78 -er- cent above prewar levels. Since residential rebuilding is con- sidered a long term project there is no provision for extensive re-building of Poland's ruined cities. In considering these indices of. economic developments, therefore, it must be noted that the population will be forced to live under crowded cond.it- ions,.much worse than those existing before the W1ar. Employment It is expected that the population in Poland will increase steadily from the present level of 24 million to about 25 million S in 1949. The present agricultural population is some 12.2 million persons compared with 20.5 million before the war. Owing to the reduction in area of Poland the present level of the agricultural population is approximately optimum for this type of agricultural economy operating with present farming methods, and it is not intended to either increase or decrease the agricultural populat- ion during the four y-ears. The non-agricultural population will increase from approximately 11.8 million persons in 1946 to 12.8 million persons in 1949. In terms of working population, betlwieen 18 and 59 years of age, however, the numbers working in agricul- ture will decrease from 7.08 million in 1946 to 6.85 million in 1949, a decline of three percent. In terms of residence the working population in rural areas will decrease from 8.4 million to 8.0 million but the working population in urban areas will in- crease from 4.4. million to 5.2 million. Table VI indicates the changed distribution between 1946 and 1949 of the working population between agriculture and industry, and between the nationalized sector of the economy and the private sector. During the Four Year Plan the distribution of the working - 31 - population between agriculture and industry will change rapidly. The proportion engaged in agriculture, both nationalized and private, will decrease from about 60 percent to 52 peroent, while industry, trade, and services will increase accordingly. The proportion of industry and services operating on a nationalized basis remains unchanged; about half is on a free enterprise basis and half on a nationalized basis throughout the Plan. The absolute expansion of manpQwer in productive industries can be gauged from the fact that, combining nationalized industry with private in- dustry and handicrafts, the total employed in these categories will increase from 2.4 million persons to 3.9 million persons in 1949, an increase of 65 percent. It should be pointed out that the category "handicrafts" includes all small scale establishments engaged in skilled trades. On March, 1st 1946, for example, this category included the following numbers of establishments under the various headings: 0 - 32 - TABLE V DEVELOP1ENT CF POLAND'S INDUSTRIAL PRODUCTION 1946 - 1949 1938 1946 1947 1948 3.949 (Prewar boundaries) Index of Industrial Production a) Old Boundaries 1938 - 100 100 67 92 128 152 b) New Boundaries 1938 100 46 31 42 59 71 Production of: Coal (Willion metric tons) 38 47 60 70 80 Electrical energy (liillion kvs) 3,880 5,300 6,000 7,000 8,000 Crude Oil (Thousand metric tons) 507 117 135 155 195 Pig Iron (Thousand metric tons) 880 726 800 1,200 1,300 Steel " " " 1,440 1,219 1,400 1,750 20000 Zinc " " it 108 58 80 90 110 Lead if It t 20 9 8 15 20 Cadmium (Mietric tons) - 116 120 160 240 Locomotives (Units) 28 156 220 270 300 Freight Cars 569 5,758 10,600 13,800 14,800 Tractors - - 300 1,200 2,000 Trucks - _ _ 200 30000 Tires and Tubes (Metric tons) 3,000 1,125 2,975 5,825 7,000 Electrical and Telecommuni- cations Equipment (1938 - 100) .-00 63 99 124 165 Nitrogen Fertilizers (Thousand metric tons) 257 180 180 410 410 Phosphate Fertilizers (Thousand mestric tons) 165 210 360 400 400 Sulphuric Acid (Thousand metric tons) 44 92 92 92 92 Carbide (Thousand zetric tons) 64.642 31 70 70 70 Anrnoniac Soda " t 87 100 135 180 200 Salt " " 417 240 290 322 340 Cotton Fabrics (kiillion meters) 400 206 300 340 400 Woolen Fabrics " " 40 20 32 45 60 Bast Fabrics " " 65 52 52 60 74 Hard Leather (Thousand metric 24 4 8 10 16 tons) Soft Leather (Thousand sq.mtrs.) 3,516 1,100 2,500 3,300 3,300 Footwear (Thousand pairs) 2,800 3,300 3,300 3,500 4,000 Cement (Thousand metric tons) 1,719 1,381 1,450 1$600 2$000 rlass (Thousand sq. meters) n.a. 9,900 12,200 12,200 12,200 Bricks and Tiles (Millions) 1,880 320 600 1,000 1,400 Paper (Thousand metric tons) 148 150 220 260 260 Souree: Provisional Basic Figures of the Plan1 of Economic Reconstruction - 33 - TABLE VI Distribution of Manpower in the Four-Year Plan (All figures in thousands) M946 19, Total Working Population 18 - 59 years of age 12,821 13,245 Nationalized Sector: 2,535 3,294. Agriculture 176 181 * Industry 1,743 2,F464 Services 616 648 Private Sector: 9,296 9,795 Agriculture 6,905 6,665 Industry 150 300 Handicraft 493 1,100 Trade and Free Professions 398 530 Housewives 1,350 1,200 Students not employed 100 156 Registered unemployed 80 Unregistered unemployed and * persons working in unlicensed trades 810 Source: Provisional Basic Figures of the Plan of Economic Reconstruction - 34 - TABLE VII Establishments engaged in "handicrafts" at 1st March, 1946 1. Building and Mineral Branch of which: 8,522 Carpenters 1,400 Masons 2,251 Painters 1,568 Glaziers 574 Stovemakers 527 2. Wood Branch of which: 9,768 Joiners' trade 62416 Wheelwrights 2,245 3. Metal and Electrical Branch of which: 17,676 Tinsmiths 1,081 Electrical install. 758 Smiths 8,305 Locksmiths 3,743 Watchmaking 1,100 4. Textile Branch of which: 12,331 Dressmaking 3,684 Tailoring 6,530 Hatters 539 5. Leather Branch of which: 15,089 Saddlers and harness makers 1,296 Shoemakers 12,571 6. Food Branch of lwhich: 16,926 Millers 1,551 Bakers 5,804 Butchers 8,633 7. Paper Branch 1,382 8. Service 4,756 9. Miscellaneous 43 Source: Quarterly Eevievw of National Economic Bank. March - June, 1946. - 35 - Thus the term "Handicrafts" has very wide connotation in PoL,)rnd., and includes a mass of small scale industrial establishments. Some indication of the expansion of manpower in the variouls industries can be obtained from table VIII showing the breakdown of the labor force in the nationalized sector according to industries. This table shows that, in many industries, the supply of manpowrer is, already in 1946, available to sustain the increased production planned for the later years of the plan; though in- creases of some ten thousands persons are required in some of the main industriep, the principal requirements of additional manpower are in the construction industry (including building materials), which requires about 270 thousand workers; the co-operative societies, which require 95 thousand; the engineering industry; which requires some 8- thousand, the textile industry, which also requires some 80 thousand; transport and communications, vwhich requires about 65 thousand and the chemical and sugar industries, which each require some 25 thousand workers. By far the greatest increase of labor, is however anticipated in industry and "handi- crafts" in the private sector; the labor force engaged therein will rise by some 150 thousand in industry and 600 thousand workers in "handicrafts", a total of three quarters of a million persons. The expansion of the labor forces of all industries and handicrafts amounts to one and a half million persons and will involve many difficulties. There is already, in 1946, a great shortage of skilled men since normal training was interrupted during the war; although the technical colleges and universities will endeavor to provide the specialists required in the requisite - 36 - numbers, this will involve very intensive courses and there zs likely to be a great shortage of highly qualified men. It is, indeed; highly probable that some degree of labor direction will have to be introduced for qualified engineers and technicians in order to ensure the optimum utilization of the trained men avail- able. Furthermore the influx of large quantities of semi-skilled labor into the expanding industries will require at least some elementary job training and there will, therefore, be a great S need for training schools and on-the-job training. Another aspect of the manpower problem is the geographical one of moving the working population to the jobs as they are created. In the first place, movements of population from one part of Poland to another may be involved, throwing additional work on transportation and services and, in some cases, causing housing problems. The Government feels that this formidable manpower problem is * not insuperable, and that, providing the industrial plant required for realization of the Plan is obtained, there will be no serious bottleneck on the training side. The Government itself will take all necessary steps to solve manpower problems as they arise. There is at prepernt no manpower registration or direotion of labor in Poland, but, in December, 1946, the Government issued a decree requiring all architects, construction engineers and draftsmen to register vwith the Ministry of Reconstruction. - 37 - TABLE VIII Employment in the Nationalized Sector by Industries 1946 1949 Net Increase 1946 - 1949 Category (I n t h o u sa n ds) Electric Power Industry 28 38 10 Coal Industry 240 250 10 Liquid Fuel Industry 15 21 6 Iron and Steel and Non-Ferrous Metals Industry 99 100 1 Engineering Industry 86 165 75 Electrotechnical Industry 11 21 10 Chemical Industry 29 53 24 Textile Industry 207 290 83 Leather Industry 14 22 8 Paper Industry 17 27 10 Wood and W,11ood Products Industry 11 24 13 Sugar Industry: Permanent workers 17 24 7 Seasonal workers 38 55 17 Food Industry 30 37 7 Construction Industry 97 326 229 Building Materials Industry 47 86 39 State Monopolies 20 30 10 Transport and Communications 485 549 64 Co-operative Societies 155 250 95 Public Utilities 97 97 _ TOTAL 1,7)43 2,1465 722 Source: Provisional Basic Figures of the Plan of Economic Reconstruction Feasibility of the Plan As far as can be judged without detailed analysis of the many factors involved, the Four Year Plan will be difficult to achieve and it would not be surprising if, in fact, the Plan encounters setbacks in some fields during the next three years. In Table IX an attempt is made to measure the expansion of industrial output planned for 1947 compared with the expansion actually achieved in the past six months, In order to eliminate - 38 - seasonal influences as far as possible, actual production in the last half of 1946 is compared with production in the first half of the year and the average monthly increase thereby calculated. From the planned total production during 1947 the assumed monthly rate of increase of production is deduced. The table thus shows how far rates of expansion actually achieved to date would, if con-- tinued throughout the second year of the Four Year Plan, suffice to realize production goals. It is important to bear in mind, when examining these figures, that further expansion of production has become progressively more difficult as devastated equipment and plant has been rehabilitated, and that, if no investment is 0 made in newr capacity, expansion would be expected to slow down progressively. Table IX indicated that, in the year 1947, the different areas of industrial activity will grow at greatly different speeds. There are some items which, instead of increasing, decrease in 1947, but in these cases the decline is hardly appreciable. In the case of coal, oil, iron ore, lead and zinc, freight cars, fertilizers, textiles and several other items, the rate of expansion envisaged is not so great as in 1946. Nevertheless, the rates of increase are still a high percentage of the monthly in- creases in the second half of 1946. Perhaps the most important project is the expansion in production of iron and steel and rolled products: in all three cases the rate of expansion in 1947 is much higher than in 1946. Other outstanding increases in production are planned in the field of manufactured metal products. such as locomotives, lathes, electric moters and cables. There are also large increases planned for gasoline, leather, wood pulp and lime. - 39 - Considering industrial production as a whole, the index of industrial production best illustrates the extent of expansion involved in the plan. The monthly increase in production between the first half and second half of 1946 amounted to 1, points to the index each month. The plans for 1947 require a steady in- crease in industrial production of 1.8 polnts per month during the -whole year. Thus, the absolute increase in production each month must be over 40 percent greater than the monthly increase achieved in 1946. Expressed as a percentage of the output in the last half of 1946 the expansion of capacity required is nearly 22 percent per month. Over the whole of 1947 the plan calls for an expansion of productive capacity by about one-third. how far is this plan capable of fulfillment? There are several favorable features. First, investment in industry was not great in 1945 and the first half of 1946 but developed rapidly in the second half of 1946; therefore, whereas in 1946 the ex- pansion of production wras based largely on repairs and recon- ditioning of capacity, in 1947 expansion is based on the invest- ments in the second half of 1946 (which totalled about 500 million dollars) and the first half of 1947, and these should yield large dividends. About one-third of the total investment in 1947, planned at 875 million dollars, will go into industry and should not only cover essential replacements of capacity at present in production but also provide new capacity. Secondly, UNFRA assist- ance during 1946 played an insignificant part in the development of industrial production, and the full effect of the equipment supplied for productive industry, although only 20 million dollars will be felt in 1947. Thirdly, the import plan for the year 1947 includes 80 million dollars of essential capital equipment and 30 - 40 - TABEE IX Planned Expansion of Industrial Production in 1947 Monthly Rate Monthly Rate Actual of Increase Planned of Increase Item Production between 1st Production Betwreen 2nd 2nd Half and 2nd Halyes Per Half Year Half 1946 and 1946 of 1946 in 1947 Year 1947 Index of Industrial Production (1938 : 100) 76 1.25 92 1.80 Coal (Million tons) 25.5 0.11 30,0 0.08 Coke (Thousand tons) 1.82 .007 2.24 .008 Crude Oil (Thousand tons) 70.9 0.47 67.5 0 Gasoline (Thousand tons) 11.6 0.21 25,4 0.26 Natural Gas (Mill.cu. meters) 60.7 0.47 65.0 0.08 Iron Ore (Thousand tone) 295 4.57 300 .083 Pig Iron " " 376 0.67 480 1.93 Steel " it 617 0.83 700 1.55 Rolled Produots 427 1.67 575 2.70 Lead and Zinc Ores 377 2.70 372 0 Lead (Thousand tons) 4.6 .012 4.8 .003 Zinc 32.3 0.19 40.0 0,14 Locomotives 78 0.15 110 0.60 Freight Cars 4,267 80 5,300 19.3 Lathes 996 11.3 2,113 20.8 Electric Motors (Tons) 572 2.60 1,010 8.17 Telephones 1,640 45.8 10,000 Electric Cables, etc. (Tons) 5,357 45.0 9,013 67.7 Batteries, Accumulators (Tons) 1,320 130. 1,329 0 Electric Bulbs (Tons) 89 0 139 0.92 Dyestuffs " 613 0 800 3.50 Sulphuric Acid 50°Be (Thousand tons) 71 0.42 88 0.32 Benzol " " 14.7 0.07 16.1 0.03 Caustic Soda " 11.1 0.15 20.0 0.17 Artificial Fertilizers (Thousand tons) 242 4.50 270 0.50 Carbide " " 17.0 - .105 35 0.33 Soap " " 7.37 .013 7.50 .003 Cotton Fabrics (Thous. meters) 115 0.50 140 0.47 'Wfoolen Fabrics " 12.1 .088 16.0 0.07 Bast Fabrics " 20.4 0.22 26.0 .103 liosiery (Thousand tons) 1,82 .012 2.90 .022 (Table It - Planned Expansion of Industrial Production in 1947 - Cont'do Pg.41) -41- Monthly Rate Monthly Rate Aotual of Increase Planned of Increase Item ProducKion between lst Production Betvieen 2nd 2nd Half and 2nd aWlves Per Half Year Half 1946 and 1946 of 1946 in 1947 Year 1947 Sole Leather (Thous. tons) 2.2s 0 44D0 0.03 Upper Leather (Thous. sq. meters) 427 3.67 1,250 15.3 Transmission Belting (Tons) 247 4.83 225 - 0.33 Wood Pulp (Thous. tons) 28.7 0.12 51.0 0.40 Cellulose t " 33.7 0.32 50.0 0.30 Paper " 83.8 0.53 110 0.48 Lime 158 0.45 250 1.70 Cement 818 7.50 750 - 1.25 Glass (Thous. sqwmeters) 4,640 41.3 4,425 - 4.00 Source: Iiinistry of Industry, Warsaw and Frovisional Basic -~ ~wFigures of the Plan of Economic Reconstruction. million dollars of other investment goods acquired through trade agreements, which, when added to the UNRRA program, give a total outside industrial investment of some 130 million dollars. The effects of these imports are very great, because they consist largely of specialized equipment which cannot possibly be produced in Poland, and will enable Polish equipment which would otherwise lie idle to b'e brought into production. The expansion of capacity which results is therefore many times the value of the original import. There are, however, several reasons why, in spite of these advantages, 100 percent achievement of the plan is doubtful. The plan is based on the assumption that certain equipment is imported and, consequently, no provision has been made for domestic pro- duction of this equipment. Feilure to obtain the imports in 1947 wvould, therefore, lead to dislocation of many branches of industry because certain items essential for expansion bhut production of - 42 - which is dependent on imports would not, in fact, be produced. Similarly, the plan depends on imports of essential rawr materi-als. Even if perfectly balanced, it is certain that Poland's own effort- wiould not result in any considerable increase in the rate of pro- gress achieved to date, and owing to the unbalance which would develop without imports it is doubtful if the rate of progress could even be maintained. The rate of expansion would, in fact, diminish rapidly owing to the difficulties of further improvising and repairing damaged equipment and plant capacity to compensate for the lack of imported equipment. Furthermore, the labor supply problem in 1947 is acute. It is necessary to achieve a net txpansion in the number of workers in industry in 1947 by 450 thousand or 19 percent. The gross in- take will have to be greater than this owing to wastage through deaths and retirement. There are certain sources from which labor could be recruited:- a) Re-atriation from Germany, France and England is expected to provide a valuable supply of labor. In Germany alone there are more than half a million Poles, many of whom are highly qualified workers. b) The city of WNarsaw, a large industrial center before the war, was very badly damaged. The population, however, has returned in large numbers and many are not at present fully occupied in their normal industry; there is, there- fore, a reservoir of qualified industrial workers in this important industrial center. c) The above increase of 450 thousand is in the age group 18-59 years. There are training schemes now operating for one million unemployed and uneducated youths wuho - 43 - eventually will provide 300 thousand qualified workers for handicrafts, agriculture and industry. d) There is also a reservoir of labor among the unemployed, the rural population, trade and commerce, and the unoccupied female population. However, it is clear that such a large inflow in labor in such a short space of time will involve rapid training of workers, and although it is expected that the labor force will on the whole be assembled, it is quite possible that the whole increase will not be obtained. This difficulty of obtaining the labor required makes all the more important the provision of investment imports from abroad; most of the increase in output per head in the various branches of industry in 1947 will result from this new equipment and the imports are essential if the best use is to be made of the labor available. it would appear, from the above general considerations, that it will be difficult to achieve the plan even if the investments imports mentioned on the previous page are, in fact, ob tained. However, the economic plan is at present being revised and, al- though production goals are approximately unchanged, one important develooment is a considerable increase in the investment imports scheduled for 1947. With these additional imports the plan should approximately be realized. Without any international assistance the amount of investment imports and the rate of increase of production would fall rapidly if it did not disappear altogether. As a rough estimate, based on the present rate of increase of production, it would appear that the plan lwrould only be fulfilled to the extent of about 93 percent. This may not at first sight seem a very serious defic- - 44 - iency, but, since expansion of production is obtained only from gross investment in excess of that required to offset depreciaation of equipment at present in use, the loss of some seven percent of production might well remove all possibilities of the rapid indus- trial recovery envisaged in the plan. Gross investment in agri- cultunre and industry is only some 22 percent of total production in 1947 and a considerable proportion of this is required to off- set wrvear and tear. The loss of seven percent of industrial pro- duction in 1947 means the loss of three percent of total produc- 0 tion and this would represent a large part of the new investment upon which expansion of capacity depends. By 1949 the effect -would be cumulative and involve a greatly magnified deficiency. For this reason it is most important that Poland should receive all the assistance possible in financing the essential imports of canital equipment in 1947. For purposes of reference a list is appended as Appendix II showing in detail the types of i.mported equipment which are essential to the fulfillment of the four year industrial plan. For the most part these are impossible to pro- duce, for technical reasons, in Poland, and their importance for the achievement of the increased standard of living of the Polish people is many times the dollar values involved. IV. THE CONTDITION OF SOME BASIC INDUSTRIES Having examined the condition of Polish industry generally, and plans for future development, we can now examine, in more detail, the condition of those industries which form the founda- tions of Poland's industrial structure. - 45 - Coal In view of the fact that Great Britain is now producing virtually no coal for export, and that German coal production is only a fraction of prewar production and insufficient to cover her own needs, there is now a chronic shortage of coal in Europe and Polish coal production has assumed great significance. Poland is the only country in Europe which has a large surplus of coal for export. The speedy rehabilitation of the Polish coal industry is, therefore, of great importance for the rehabilitation of Euro.ean industry. The rapid expansion of coal production is also viLal for Poland herself; coal exports in 1947 will be turo thirds of the total exports of $300 million and are her main means of paying for the imports necessary to fulfill the Four Year Plan. As a result of frontier revision, postwar Poland includes the entire Silesian coal basin, the largest reserve of coal in Con- tinental Europe. The Silesian coal fields (comprising part of prewliar Poland and also the ex-German area) taken over by the Polish Government have an area of about 2,800 square kilometers v theit' coal: reserves to a depth of 1,200 meters, were estimated at 76.5 thousand million metric tons as compared with 40 thousand million in the Ruhr Basin and 56 thousand million tons in the 2/ basin of the Don Geologically, the Silesian coal basin, the Dabrown-Jaworzno and the Morava-Karvina fields, are one - the coal belongs to the same formation, although the depth and quality of the deposit varies. 1/ Handbuch des Oberschlesian Industrie-Bezirkes, Katowice, 1913 / Wlalter Grieff, Deutsche Monatschefte, April - June, 1942 - 46 - As a result of the plebiscite in 1920 Poland acquired peart of Silesia, the Silesian industrial basin thus being divided after the first world war between Poland and Germany. In June, 1945 Poland became responsible for the whole basin, and thereby her coal producing capacity was increased by nearly 80 percent. In 1937 production of coal in all the areas included in postwar Poland was 64,650 million tons, compared with 36.200 million tons in prewar Poland. Table X shows details of the out- put in 1937'in the various areas now in Poland and the number of workers employed in these coalfields in 1938. TABLE X Production and Employment in Polish Coalfields 1937 Output lWJorkers Employed -(Millions of (19_3)''' metric tons) Prewar Poland 36.2 80,700 Ex-German Upper Silesia 23.2 49,963 Ex-German Lower Silesia -5.25 19,481 TOTAL 64.65 150,144 Sources: Statistical Year Book of Poland, 1939, Germany Basic Handbook, Section F, the Mineral Industries, Foreign wOffice and Ministry Qf Economic Warfare, London, 1944 It is necessary, before describing the postwar problems of the rolish coal industry, to explain the main characteristics of coal-mining in the area. Coal production is conducted at an average depth of about 500 meters (about 1700 feet) and has reached levels of 800 meters. The coal seams range from 0.5 to 20 meters in height and 5 kilometers to 14 kilometers in length. The angle of repose varies from 0 degrees to 90 degrees. The coal is transported underground over long distances, in some cases as long as 14 kilometers. When seams are over 2.2 meters in height the mined-out area is promptly filled with sand to prevent subsi- - 47 - dence and resulting damage to adjacent workings and surface. This sand filling is, on the whole, on a mechanized basis. Further- more, some of the coal mines have to work under high pressures of water, and water must be pumped out at a rate of 40 tons per ton of coal raised. Coal cutting is, as far as possible, on a mech- anical basis, at present about 25 percent of the total output being cut mechanically; transport by conveyor belt is also extensively used, a total of more than 400 kilometers of belting being in operation. In addition, electric locomotives are used for under- ground transport. These characteristics of the Polish coal in- dustry involve the utilization of large quantities of electrical energy, pumping equipment and pipelines. During the war the Germans brought the whole coalfield under one administration, the "Gau Oberschlesien". They exploited the whole coalfield ruthlessly, concentrating on maximum output without regard to the condition of the workings, sand filling, or maintenance of the equipment and power plant. Some indication of the extent of exploitation is the fact that 400 million tons of the best coal were mined between 1940 and 1944. In one month production reached the level of seven million tons, i.e. 84 million tons per annum, whereas, even in 1946, after more than a year of rehabilitation, the mines have only produced 47.3 million tons, There was a certain amoumt of malicious damage as the Germans retreated. The most serious losses to the industry, how- ever, were the numbers of miners and qualified mining engineers deported or killed during the occupation; only 73 thousand mine workers remained in February, 1945, compared with the prewrar labor force in the area as a whole of 150 thousand workers. When the Polish authorities took over the coal fields, - 48 - out of a total of 80 mines, 42 were on fire and 17 were unde7- water, the workings of the remainder were seriously in need of maintenance and would require a large expenditure of effort to restore them to normal conditions. Sand filling had not been carried out by the Germans and this backlog had to be made up; dangerous cavements have, in fact occurred, particularly around. the largest iron and steel works "Huta Pokoj" where the surface sank to a depth of tvwo meters. The devastation of underground equipment and screening and washing plants meant that the ¢oal produced could not be sorted and cleaned, with the result that a large proportiQn of output was unavoidably coal dust and fines. Because of the importance of coal production to Poland, every effort was made to rehabilitate the mines at maximum speed. In spite of all the difficulties, progress has been remarkable. A labor force has been assembled very rapidly; the 73 thousand workers in February, 1945 were expanded to 138 thousand by Sept- ember. By December, 1945 there vwere 178 thousand and, at the present moment, there are some 200 thousand. This is a higher 0 figure than the prewar level of 150 thousand in this area in 1938, but the work of rehabilitating workings and equipment has meant the diversion of a large part of the effort to vwork which has not yielded immediate results. Production has rapidly increased. In June, 1945 only about 100 thousand tons of coal were mined but by December, 1945 production reached nearly three million metric tons. Throughout 1946 progress has been maintained, though be- tween February and July production failed to respond to increased efforts. Production since July has risen steadily and, in the last quarter of 1946, reached 13.3 million metric tons, vwhich is some 83 percent of the 1937 production of prewar Poland and the - 49 - ex-German territories combined. Production in the year 1946 as a whole was 47.3 million tons, which is about 70 percent of prewar annualProduction. This recovery was achieved with only slight assistance from UNRRA since the bulk of the assistance to the coal industry arrived in Poland only after the last quarter of 1946. According to official plans, which assume the supply of vital investment needs from abroad, production should reach 60 million tons in 1947 (approximately the prewar level), 70 million tons in 1948, and 80 million tons in 1949, a level 25 percent greater than in 1937. Of the 1945 production of about 20 million tons of coal, 5.4. million tons were exported. In 1946 14.2 million tons out of 47.3 million tons were exported, and in 1948 and 1949 exports will rise to 28 million tons and 35 million tons respectively. Expansion of production according to plan will require the breaking of several bottlenecks. Generally speaking, the industry has to surmount two major problems. First, it has to make up the backlog of maintenance, such as sand filling and repair of equip- ment, and secondly, it has to replace underground machinery, washing and screening plant, power supplies, etc. which are obso- lete or worn out, as well as to extend the capital equipment. In the case of sand filling for example, in 1946, 26 percent of the sand filling was done by hand and in 1947 30 percent will have to be done by hand. Modern equipment is required for mechanical sand filling, and the erection of a central sand filling plant in the near future is imperative. Large investments are needed both in equi-pment and in the many pipelines required to press the sand direct into the pits. In the case of replacement of equipment, the main bottleneck - 50 - is mechanical energy and compressors. At present the electrical power installed supplies only 300 megawatts, wihereas electrical power capacity required is some 480 megavatts. Even at the pre- sent moment the plant is fully extended in supplying the electrical energy required, whereas, under normal conditions, one-third of the capacity would be in reserve at any one moment. Present shortages are covered by drawing energy from the greatly overload- ed district Power Plants. There are 820 boilers involved in pro- ducing electric power; 70 percent of these are over 25 years old and should be replaced at the earliest possible moment. 128 turbo generator sets are installed in 42 power plants; 78 percent of these are over 20 years old, and at least two thirds of these should be replaced immediately. In order to build up the electric power capacity of 480 megawatts, n.ew boilers to generate three thousand tons of steam per hour and turbo generator sets to generate 180 megawatts must be installed. A new power plant is being built near Jaworzne, but will not be completed in time; since three new coal mines will soon be placed in operation the greatest problem is to maintain the present power plant at maxi- mum production. The second bottleneck is the shortage of coal-mining equip- ment, compressors, coal cutters, mechanical loading equipment, locomotives and workshop equipment. Only 139 steam operated and 176 electrically operated winding plants are available for 470 serviceable shafts. Furthermore, only 20 percent of these are less than 20 years old and some are over 50 years old. It is very essential not only to repair exist- ing machines but also to install as soon as possible 50 new elec- trically operated ones. At present there are 380 compressors wi.th - 51 - capacity of 2.66 million cubic meters per hour, 50 percent of which are over 20 years old. Economically compressed air as a source of power is inferior to direct electric drive but, due to shortage of electricity, only a small proportion of the power will be switched to this source. Considering the present lack of any reserve for necessary replacements and required expansion it is estimated that additional compressors foar 0.8 million cubic meters per hour are required in the next three years. There are now 139 screening, 34 washing, 12 dust removing and 5 flotation plants, 80 percent of which date from the first world war and are obsolete. It is, therefore, necessary during the next three years, to install 20 new screening plants and 25 new washing and dust removing plants. The Polish coal industry has only 900 electric looomotives in operation, and these should be supplemented by approximately another two thousand. Approximately two thousand additional lathes, besides other machinery, are necessary to handle the day-to-day repair and reconditioning of existing capacity. It is planned to establish a modern factory for the manufacture of electric mining machinery equipped first vwth 250 lathes and then in 1947, with 870. The large increase in exports will throw an additional strain on the railroads leading to the ports and to the East, and about 1,500 locomotives and 20 thou- sand railroad cars will eventually be required for this purpose. To sum up the situation in the coal industry; rehabilitation has been very satisfactory to date, but German over-exploitation of the mines has left a chronic problem of maintenance and re- placement which stands in the wray of further expansion of produc- tion. Unfortunately, although Poland herself oan produce much of the washing and screening plant-required and some of the under- - 52 - ground and ancillary equipment, the greater part of the unce-z.- ground machinery, electric power plant, and railroad equipment, cannot be produced in Poland and must come from abroad. Unless these vital imports are forthcoming it will be virtually imposs- ible to expand Polish production and may be impossible even to maintain existing levels of output. Appendix III is a sumnary of the main machinery and equipment required from abroad. Most of this is mechanical and electrical equipment such as turbo gener- ators, turbo compressors, underground transport, and machine tools. 14 million dollars worth of underground machinery is required, and some 13 million dollars worth of equipment for hydraulic sand stowing. The import of this equipment is vital to the success of the four-year plan for the Polish coal industry;assistance from UNRlA is limited to a few critical items, such as coal cutters, electric locomotives, loaders and conveyor belting, valued at $5.87 million, and the remainder must come largely from the U.S.A. and the U.S. and because of the absence of exports to these coun- tries, must be largely financed from loans. * Coke Ovens Approximately the same situation as that described above prevails in the coke oven industry. The ovens in operation can be divided into three classes:- a) Modern ovens of recent construction or reconstruction, carbonizing some 30 percent of the coal now being processed; b) Modern ovens which have been at vork longer than the average life of such equipment, carbonizing 33 percent of the coal; c) Obsolete ovens of low capacity, through which 35 percent of the coal is carbonized. Overns in class (b) will need rebuilding during the next three - 53 - to five years while the obsolete ovens must be scrapped as soon as substitutes can be provided. A building program of 191 new! ovens is scheduled for the next three years and there are three plants out of commission which should be in operation within the next twro years, as soon as the necessary steel work, machines, etc., have been obtained. These should enable the obsolete ovens in class (c) to be scrapped and the ovens in class (b) to be re- built without decreasing production. Nevertheless, the four-year plan involves the patching up of obsolete batteries for about tWQo years, in order to fill the urgent need to step up coke production immediately. The by-product plant, is in general good and will be maintained by the provision of new plant. There is, however, an almost universal absence of tar extractors. Benzole recovery plants are generally in good condition and, where it is not intended to increase capacity, no additions or replacements are needed. Oil and Natural Gas Oil * Poland was not, before the war, a heavy user of oil. She had, in 1939, only about 42 thousand motor cars and 12 thousand motor cycles. H-er production of oil - about 500 thousand tons of crude oil per annum - was approximately in relation to her needs and she did not import or export on any large scale. Partly as a result of UNRRA supplies of iaotor vehicles, Poland's needs are now much greater than before the war (about 650 thousand tons in 1946) but she has now less oil available within her own frontiers. In contrast to the striking gains made in her coal resources, Poland has left, as a result of frontier revision, only some 23.5 percent of the prewar oil-bearing areas. Her estimated reserve of -54 - crude oil in 1932 was approximately 160 million metric tons in fields up to one thousand meters in depth.4/ Before the war a labor force of about ten thousand workers was employed in the extraction of 500 thousand metric tons of crude oil, of which territories now transferred to the U.S.S.R. supplied 370 thousand tons, and the Jaslo district, left to postwar Poland, 130 thousand tons. Production in the Jaslo area has been adversely affected by the vwar and there are no known oil-bearing districts in the territories acquired in the West. However, geological and geo- physical explorations before, during and after the war have indi- cated new potential oil producing areas, notably around Poznan. If the new areas are fully exploited, and deeper horizons in existing fields penetrated, there is every likelihood that, in three to four years, Poland will approach the levels of output attained within the present boundaries before the war. German exploitation of Polish oil wells followed the same course as in other industries. Wells were exploited to the max- imum whereas new drilling was kept down to a minimum. As a result of this exploitation, wells at present in operation are near the end of their life but there are insufficient new wells ready to come into operation. When the enemy retreated he removed about 80 percent of the tools and equipment for drilling activities to Germany and Czechoslovakia, thus rendering the task of maintaining output extremely difficult. Refining equipment vwas also exploited without regards to maintenance and it was further damaged and destroyed during the heavy fighting in l944 and 1945. As in other industries, the losses in highly skilled manpower in the oil industry were severe. After the war the Polish Government made strenuous efforts to 1/ Polish neological Institute: Statistical Atlas of Poland, 1932 - 55 - revive crude oil production, and, by utilizing equipment and available manpower to the best advantage, production was gradually increased. New wells have been drilled but, owing to the closing of unproductive wells, the number in operation has only increased from 2,139 in 1944 to 2,300 in 1946. The following table shows production in Poland within its present frontiers, from January, 1944 to December, 1946, showing the steady progress in resuming production following the setbacks caused by military operations in 1944. TABLE XI 0 Crude Oil Production 1944 - 1946 (In metric tons) Output in August, 1939 within present boundaries L 14,240 tons Month 1944 1945 1946 January 11,609 6,165 9,082 February 10,923 7,438 8,081 March 11,849 8,785 9,417 April 11,532 8,925 9,276 May 11,798 7,988 9,974 June 11,372 9,330 9,806 July 7,679 9,371 10,9266 August 3,610 9,486 lo,063 September 4,801 8,966 10,189 October 7,832 9,461 10,316 Novemrner 8,461 9,023 9,948 Decem3-er 9,464 9,027 10,312 TOTAL 110,930 103,965 116,730 Source: Ministry of Industry, Warsaw The above table shows that crude oil production has now reached nearly 75 percent of prewar levels in the present boun- daries; this is, however, only some 23 percent of prewar pro- duction in the old boundaries. Production of petrol has also recovered; it was 3,000 tons in December, 1946, i.e. about 25 per- cent of output before the war in the old boundaries. - 56 - In 1946 only 23 percent of total requirements of oil wve-c produced from home supplies and another 30 percent by the refiniing of imported crude oil. 47 percent, or just over 300 thousand tons, had to be imported in the form of final products. In 1947 it is hoped that crude oil production will reach 135 thousand tons, compared with the 500 thousand tons produced in prewar Poland and requirements of some 650 thousands tons. By 1949 it is hoped that production will be nearly 200 thousand tons. In view of the abundance of raw materials for the production of synthetic oil within Poland, there would seem to be an excellent - opportunity to supplement production of natural gasoline by development of synthetic oil plants, although, because of the shortage of experienced Polish engineers and technicians, this would not be an easy task. Germany operated five synthetic gaso- line plants in the recovered territories. Two of these, Blachownia and Kedzierzyn, produced a million tons of gasoline per annum, but output of the other three, at Zdzierzowice, Walbryzch and Szczecin, it not known. These five plants, however, were dis- mantled in 1945 to 1946 and taken out of Poland. The Germans were also building a synthetic gasoline plant at Oswiecim. Al- though this, too, was depleted after the vwar, efforts are now beinq made to construct this plant and it is hoped that production will start in 1949. Natural Gas More or less similar conditions have obtained in natural gas production, Fluctuations in output in this case, however, iwere on account of reduced consumption rather than production diffi- culties, except in January, 1945 wshen military activities inter- fered with production. Natural gas production in 1944, 1945 and - 57 - 1946 is shown below: TABLE XII Natural Gas Production 1944 - 1946 (In thousand cubic meters} Month 1924 191L5 1946 January 23,238 4,118 15,789 February 21,226 11,170 13,226 March 21,823 13,033 14,293 April 16,973 12,320 11,910 May 12,776 9,411 10,829 June 10,595 9,285 9,779 July 13,242 8,434 9,717 August 13,454 9,852 10,165 September 12,330 10,787 10,490 October 13,360 13,;14 13,164 November 12,940 13,d09 13,414 December 13,546 14,5462 14,957 TOTAL 185,503 129,995 147,733 Source: Ministry of Industry, Warsaw Owing to the change in frontiers, it has been necespary to import from the territory transferred to the U.S.S.R. (Daszawa sector) some 10.5 million cubic meters per month in order to service the Sandomir district, which consumes 48 percent of the natural gas used in Poland. Prospects for the discovery of large new gas wells are somewhat poor and these imports will have to continue. A new gas well has, however, been discovered in the vicinity of Debrowice which will yield over four million cubic meters per month and reduce imports from Daszawma accordingly. Natural gas is being distributed from the centers of pro- duction - Roztok Strachocin and Debrowice - by means of a net of pipe lines which is being rapidly extended. Before the war the - total length of lift* was 540 kilometers, at the end of the war it was 760 kilometers, and today it is 840 kilometers. At the end - 58 - of the Four Year Plan it will reach 1,100 kilometers. New pipe lines lead direct to the industrial center of Upper Silesia and are designed to make possible the distribution oL natural gas in co-ordination with that of coal gas produced in the area. The further development of Poland's oil and natural ga s pro- duction depends mainly upon her ability to increase both productive and research drilling activities. In 1938, 152 thousand meters were drilled and, although in 1946 approximately twice this number of meters was drilled, activities still need to be expanded considerably. In order to increase the drilling, it will be necessary for Poland to import equipment from the United States, practically the only source of supply. The Polish oil refineries have, for the most part, run down and o'-solete equipment, overdue for replacement. Furthermore, two of the main refineries, NiegXowice-Jaslo and Trzebinia, which together account for about half the total production, suffer from acute shortages of equipment which was either removed or destroyed during the war. Although equipment will be transferred, as rep- arations, from Schwarzheide near Dresden, here again certain equipment must be imPorted from the United States. Equipment for the synthetic oil plant at Oswiecim must also be purchased in the United States. The total cost of investments in the oil industry is estimated at about 25 million dollars, of which about 11 millioL - dollars must be imported from the United States. The UNRRA program in Poland has provided 12 heavy and medium drilling rigs and five rotary drilling rigs for speed drilling. Furthermore, i t has provided compressors, pumps and boilers. The total program is valued at about 13 million dollars. There - 59 - remain, however, large requirements which can only be fulfil>4-d by direct purchase in the United States by the Polish Government. Iron and Steel Rehabilitation of Polish industry, particularly the light and heavy engineering industry, is dependent to a high degree upon re- habilitation of the iron and steel industry. Its importance is particularly great in the rehabilitation of transport, through the production of rails and railway rolling stock. The industry was one of those most devastated by the war, and its recovery has proved one of the greatest problems in Poland's rehabilitation. Iron Ore and Scrap Iron - In prewar Poland there wiere iron ore deposits in three regions; between the Pilica and Vistula rivers in south central Poland, in the south western part of the country between Wielun and Czestochowa, and in the south east on the Polish-Czechoslovak border. The ores in these mines, howvever, are of poor quality with a low percentage of iron and require mixing with high grade imported ores and scrap. Poland's domestic production of iron ore in 1937 amounted to 792 thousand metric tons and in 1938 to 872 thousand tons. Since this amount w^as in- suffic4ent to meet domestic needs, Poland was a large importer of both iron ore and scrap. In 1937, in fact, the country haa to import 642 thousand metric tons of iron ore and 589 thousand tons of scrap iron. As a result of the war Poland did not lose any of her iroh ore mines but acquired two mines in ex-German Silesia - the "'Wolnoso" mine at Krzyzatka, with a prewar annual output of 72 thousand metric tons and an estimated capacity of 48 thousand metric tons after rehabilitation and the "W.riloza" mine which was heavlly damaged and where operations cannot be resumed for some time. - 6o - When, in August, 1945, the Union of Iron Ore Mines (ZMrTiPzk Kopalni Rud Zalanznyoh), took over 26 iron ore mines from the 1/ previous Administration on behalf of the Polish Government , it found five mines en'tirely out of action, all mines flooded and total damage estimated at 98 percent of productive capacity. The Government commenced draining and repair work immediately. By October, 1945, all mines except two were cleared of water and estimated damage was reduced to 40 percent. Lack of materials and equipment, however, slowed up the vwork. Complete rehabili- tation of the entire industry in expected in 1947. Production of iron ore in April, 1945, was only 1,754 tons. By December, 1945 output had been increased to 22 thousand tons, by July, 1946 it had reached 40 thousand tons. In December, 1946 it wias 36.7 thousand tons, an annual rate of 440 thousand tons and 55 percent of the prewar level. Pending complete rehabilitation, the requirements of the domestic iron and steel industry are being met principally by imports from the U.S.S.R. and from Sweden. Importations from the * U.S.S.R. in 1945 were 136,095 metric tons of iron ore, 35,732 tons of manganese and chrome ore, 95 tons of ferro-alloys and 486 tons of non-ferrous metals. During the same year imports of iron ore from Sweden were 96,549 metric tons. Imports in 1946 were 150 thousand tons from the U.S.S.R. and 827 thousand tons from Sweden. Before the war Poland relied on foreign sources of supply for two-thirds of a million metric tons of scrap iron annually, 1/ In January, 1946 the Polish Government issued a decree nation- alizing iron ore production. The industry is now under the direction of the Union of Tron Ore Mines. 2/ Report of the Union of Iron Ore Mines, KatowiceJ November, 1945 - 61 - Since the war, however, she has filled her requirements from domestic collections. During 1946 she used 470 thousand tons and it was only necessary to import some ten thousand tons from Denmark. The table below shows requirements and supplies of iron ore and scrap iron in 1947, showing that, in this year, Foland must import 1.5 million tons of iron ore and 120 thousand tons of scrapD iron. TABLE XIII Raw Material Requirements of the Polish Iron and Steel Industry in 1947 (In thousand metric tons) Total Domestic Required Requirements Supplies Imports Iron Ore 2,100 600 1,500 Scrap Iron 570 450 120 Source: Ministry of Industry, Warsaw, and National Economic Plan (Provisional Figures). Requirements of iron ore and scrap will increase rapidly as the iron and steel industry is rehabilitated. By 1949 3,2 million tons of iron ore and 850 thousand tons of scrap iron will be required annually. This rapid development will require large imports of iron ore, probably exceeding twvo million tons in the year 1949. Although, as a result of war destruction there are an estimated two million tons of scrap iron in Poland, about one million tons vwill have been used by the end of 1947 and, since the cost of recovery will rise progressively as supplies are exhausted, she will probably have to import the bulk of her scrap iron requirements throughout 1948 and 1949. - 62 _ Pig Iron and Steel - Before 1937, the Polish iron and sucoel industry was mainly localized near the Silesian coalfields; early in 1937, however, the Polish Government began to encourage the industrialization of the southern part of Central Poland, and to develop the so-called Central Industrial Region as part of a plan to make Poland a semi-industrial country. In some respects this plan resembled the United States Tennessee Valley scheme - in both cases the planning was applied to regions wihich were socially and economically backward and in both cases the area in question wras a river valley. Inasmuch as it aimed ultimately at the indust- rialization of the whole country, the Polish plan went further. At the confluence of the Vistula and the San in an area of about 24 thousand square miles inhabited by approximately 5,500 million peoiple a new transport center and a new center of heavy industry, ~~~~~~~~~/ second only to Silesia, were planned. At the outbreak of the war considerable progress had been made and entirely new units of heavy industry were in full production. The war, of course, stopped any further expansion. *Mithin the prewar frontiers of Poland there were (in 1938) 23 iron works employing 46,600 workers and producing 879 thousand metric tons of pig iron, 1.441 million tons of steel, 1.074 million tons of hot rolled products, and 80 thousand tons of seamless and welded tubes. As a result of frontier revision Poland received important additions to her iron and steel industry in the form of the "Vereinigte Oberschlesische Huttenwerke A.G." with an annual capacity, in 1938, of 275 thousand tons of pig P/ Foland's Progress 199 - 19392, M. Murphy, London, 1944 - 63 - iron and 700 thousand tons of crude steel,-/and of the "Hochofenwerk Lubeck" at Stettin, producing 150 thousand tons of pig iron annually.' At prewar production levels the capacity of the Polish iron and steel industry would, therefore, now amount to 2.141 million metric tons of steel, 1.304 million tons of pig iron and to about 1,600 million tons of rolled and forged steel. However, in drawing conclusions from these estimates, account must be taken of the extent of war damage and of the possible speed of rehabilitation. When the Polish Government took charge in 1945, they found that in addition to damage resulting fromi over exploitation during the war and actual military operations, large quantities of mach- inery had been removed. Approximately 75 percent of the total plant and equipment was removed or seriously damaged, and some large centers like Stalowa lWola, Starachowice and Ostrowice had been completely demolished. Moreover, much of the equipment and machinery had to be scrapped as it had been used by the enemy exclusively in the production of ammunition and other armaments. The Government placed the iron and steel industry under the unifie control of the Central Administration of the Iron and Steel In- dustry, wthich at the present time controls the operations of 23 plants in addition to three plants which are now not in use because their immediate rehabilitation is not practicable. The Central Administration plans to complete the reconstruction of 25 plants by 1948 or 1949 at a cost of approximately 80 million U.S. dollars (excluding rorkers' housing). 1/ Germany, Basic Handbook, Economic Survey, Section H. The Metal Industries, Foreign Office and Ministry of Economic WAarfare, London, September, 1944. -6 4- Initially rehabilitation vwas held up principally by lack of machine tools and materials such as rubber and leather belts, ball-bearings, electrodes and electrical equipment, and chemic- als. Labor shortage did not at first present a major obstacle. In 1939 the iron and steel industry employed 85 thousand workers. Some 35 to 40 thousand remained in the area following the term- ination of hostilities, but, because of the heavy destruction and dislocation of plant, were adequate. Since that date the labor force has expanded to 81 thousand workers and has been adequate to sustain the increase in production. TJnfortunately, there is an acute shortage of administrators, managers and fully qualified engineers, because of extermination of intelligentsia during the war and the German policy of closing all high schools and techni- cal schools which has left a gap of six years in normal training of new technicians. At the present moment, the industry requires some 700 specialized engineers. The problem will probably he solved by the arrival of deported engineers and the flow of trained men from the expanded schooling facilities in VrocXaw.,, Warsaw, Gliwice, Gdansk and Krakow. The future outlook, however, is not bright; the present labor force is inadequate to provide for the rapid expansion now provided for in the four year plan. However, technical training for ordinary workers has been organ- ized and it is hoped that, as additional plant and equipment comes forward, additional labor will be available. In 1945 underfeeding. lack of skilled workers, deterioration of capital equipment, and the necessity of employing a relatively large number of workers on rehabilitation rather than on production, resulted in a level of output per head in the industry about 50 percent of prewar. / Re-port of the Central Administration of the Iron and Steel Industry, Katowice, to the Polish Embassy, London, November, 194r 5. - 65 - this, however, has now been-corrected and, at the end of 1946, except in blast furnaces and rolling mills, output per head wrias slightly higher than before the war. In the case of rolling mills, efficiency is only 80 percent, and in the case of blast furnaces 90 percent. To increase efficiency will require the import of more modern equipment from the United. States. By improvising and repairing its equipment the industry has gradually re-established itself. The development of production is shown in the following table; TABLE XIV Polish Iron and Steel Industry Production 1945 and 1946 (In metric tons) April December June December - 9 4 5 l946 Pig Iron 8,296 35,055 62,222 55,586 Crude Steel 17,087 73,946 95,388 110,699 Rolled Products 13,140 44,733 62,144 71,555 Forgings and Pressings 409 3,588 4,729 5,476 Castings 274 2,369 3,450 2,7191' 1/ Excluding Zgoda steel mill which had production in June of 1400 tons. Source: Ministry of Industry, Wlarsaw. In order to present this remarkable recovery in true perspec- tive' a comparison is made in Table XV with production in prewar and postwrar Poland, in 1938, and with planned production in 1949. - 66 - TABLE XV Prewar and Postwar Iron and Steel Production in Poland (In metric tons) Average Monthly Output in Planned Average Output December Monthly Output 1938 19416 1949 Prewar Postwar - Postwar Postwar Poland Poland Poland Poland Pig Iron 73,250 108,666 55,586 108,000 Steel 120,083 178,1416 110,699 167,000 Rolled Products 89,500 135,333 71,555 125,000 Source: Ministry of Industry, Warsaw. The above table shows that production of iron and steel has now reached some 60 percent of prewar production in the area now within Polish frontiers. Output will, according to the four-year plan, expand steadily throughout the next three years to reach 1.3 million tons of pig iron, two million tons of steel and 1.5 mill- ion tons of rolled products, in the year 1949. As may be seen from the table, this will bring production approximately up to the levels which were achieved in the same area in 1938. Thus, the four-year plan provides for the complete reconstruction of the industry; since a large part was destroyed and worn out during the war this involves extensive rebuilding to make up for these losses. At present the iron and steel industry is operating with equipment that is largely out of date, and which in many cases, can only remain in production by means of extensive repairs. Most of the equipment in the industry was originally supplied by foreign engineering plants, mainly German. German plants have been largely destroyed by the war and replacements for Polish - 67 - equipment cannot be obtained. It is, therefore, necessary for the industry itself to make the spare parts. There is the great misdirection of effort, since, in the first place, an undue amount of effort is expended in producing these parts and, in the second place, they are being produced to keep inefficient units of pro- duction in operation long after their economic life should have ended, The greatest bottleneck is in the rolling mills, which are greatly overloaded, and where very obsolete equipment has to be retained to maintain production on what would normally be considered a completely uneconomic basis. Driving power in the mills constitutes one of the main obstacles and breakdowns occur all too frequently because of over-exploitation. Several new power plants are, however, being constructed. Obsolete blast furnaces are also operating in order to maintain output, but they are too small and give endless trouble in operation. Blast furnaces, coke plants, and rolling mills are all operating on outdated methods and reorganization of the industry, using modern mechanized methods, is necessary. Until this can be achieved excessive costs of production and wasteful expenditure of man- power are unavoidable. The four-year plan, providing for expansion of output up to the prewar capacity of the iron and steel industry in Silesia, requires that the remaining old-fashioned installations, such as blast furnaces, I9Martin ovens and rolling mills, should be either completely scrapped and replaced or modernized. The total cost of the investments required for reconstruction of the iron, zinc and non-ferrous metal smelting industry, ore-mining and coke plants is estimated at some $185 million, of which no less than $40 million would have to be imported frorm abroad. The contrib- - 68 - ution of UNRRA to rehabilitation of these industries has been ex- tremely small, and the financing of their reconstruction remains as one of the main Polish problems in 1947. Orders could be placed in England, Belgium and Switzerland, but delivery would take at least two to three years; the only country in the world capable of supplying the equipment in the near future is the United States. It is essential, therefore, for the reconstruction of the Polish iron and steel industry, that the necessary means should b.e found to enable the country to purchase this vital * equipment in the United States. Ferro-Allo7s and. on-Ferrous Metals Ferro-Alloys - Ferro-alloys 1/, indispensable to the manu- facture of steel, impart high tensile strength, toughness, and resistance to corrosion. Except for the output of the "Electro" plant at Xariska Gorne which produced ferro-chrome and ferro- silica, and some supplies produced incidentally by certain steel manufacturing firms, the Polish i.ron and steel industry's prewar requirements of ferro-alloys were met by imports. By far the largest proportion of these was manganese ore of which is 1937 over 82 thousand tons were imported, mainly from the U.S S.R. and British India. As a result of frontier revision Poland acquired from Germany a mine of manganiferous iron ore at Gierent, an experimental tin mine at Gerlich and a plant near .WrocXaw w.hich has an estimated annual capacity of 30 thousand tons of 45 percent ferro-silicon and ten thousand tons of ferro- 1/ Compounds of iron with manganese, chrome, molybdenum, tungsten, venadium, silicon and titanium. - 69 - chromium /. All equipment of the latter plant, however, has been removed. In view of the expansion of the Polish iron and steel industry, imports of ferro-alloys will, nevertheless, have to be increased appreciably over their prewar total. During the year 1946 Poland imported 41.5 thousand tons of manganese and chromium ore and 301 tons of alloys from the U.S.S.R,,, 1,262 tons of chromium concentrates from Yugoslavia and 9.1 thousand tons of manganese ore from Rumania. Nickel - Prewar Poland had no nickel bearing ores, but frontier revision has given her the ex-German low grade silicate deposits situated at Zabkowice near WrocXaw from which German nickel production was mainly derived. In 1937, the last year for which information is available, German output was 900 metric tons while in the same year Polish imports of nickel amounted to 770 metric tons. Stocks in the country amount to 500 tons at present. It is probable that, even when the iron and steel industry is completely rehabilitated, these recently acquired sources of supply will make it unnecessary for Poland to import nickel in the fu'ture. Copper - In 1939 Poland had small deposits of copper ore in the Gory Swietokrzyskie district of Central Poland but, owing to the small percentage of copper and the conseqvtent high cost of 'roduction, those deposits had never been considered profitable 1/ Germany,Basic Handbook, Economic Survey, Section H, The Metal Industries, Foreign Office and Ministry of Economic Warfare, London, October. 1944. 2/ The ores wiere smelted in the Schlesiscbe Nickelwerke A.G. with and estimated annual capacity of one thousand tons and the Gewerkschaft Nickel with an estimated annual capacity of 500 tons. See Germany Basic Handbook, Economic Survey, Section H, Fo1eign Office and Ministry of Economic Warfare, London, October - 70 - sources of raw material. Domestic industry had, therefore, relied on imports which in 1937 amounted to over 17 thousand tons of copper in pigs, bars and ingots. As a result of the war Poland acquired the Lena, Konrad and Lubichow copper mines, the latter having deposits of anhydrite. All mines are flooded and contain very little equipment. A copper rolling mill at Wizow was being built by the Germans but all equipment has been removed. One smelting and refining plant has been acquired at Stocryn, near Szczecin, with estimated annual electrolytic refining capacity of three thousand tons, but the equi-ment of this plant is incomplete. WThen the Polish Government assumed control of the proper- ties in November, 1945, all mines were found to be flooded and the machinery removed. Rehabilitation is proceeding but Poland will still have to import on a large scale. With UNRRA supplies she filled her needs for 1946, but she requires about 24 thousand tons in 1947; it is hoped that she can arrange with the U.S.S.R. to supply the necessary imports. Tin - Before the war Foland was not a tin producing coun- try and depended on imports of ingots, bars and sheets to the 1/ extent of 1,300 metric tons annually. In 1945 it acquired one plant engaged in the production of white and other metal for the motor car and aircraft industry (Schaefer and Schael A. G. at WrocXaw) which is partly working, and one tin mind at Flinsberg 1/ Mineral Industry, Imperial Institute, H.M. Stationery Office, l 93g 3. 2/ Germany Basic Handbook, Economic Survey Secttion H. The Metal Industries, Foreign Office and Ministry Of Economic Warfare, London, 1944. - 71 - which, unfortunately, is flooded. Tin is in short supply through- out the world, but Poland's present supply is adequate up to the end of the first quarter, 1947; with full operation of her new sourf sources of supply, she should be able to cover a large proportion of her future requirements from home production. Lead and Zinc - The prewiar Polish lead and zinc industry was concentrated mainly in Polish Silesia. In 1938 there were four mines with over two thousand workers and an output of 503 thousand metric tons of lead and zinc ore. In the same year, ten foundries employing 5,300 vrorkers produced 108 thousand metric tons of zinc, and 20 thousand tons of lead for the production of which substantial additionaal quantities of lead and zinc ore were imported (115 thousand tons of zinc ore and two thousand tons of lead ore in 1937). The 1937 ex-German mines located in the terri- tories acquired by Poland upon liberation produced another 775 thousand metric tons of lead-zinc ore and it is probable that, when rehabilitation is complete, Poland will become an exporter of lead-zinc ore. When in April, 1945 the Polish technicians arrived in Upper Silesia to take over lead and zinc ore producing mines and related i-ndustrial plants, they found widespread destruction, mines without equipment and rolling mills without machinery. After a preliminary inspection it was decided to recommence operations in the m.ost important mine, the Deutsch Bleischarley, renamed Nowy Orzelbialy (New W.7hite Eagle) rith salvaged machinery from the neighboring mines. Subsequent efforts at rehabilitation were 1/ See Concise Statistical Year Book of Poland, London, 1941 Also MineralTIndustry, Imperial Institute, E. M. Stationery Office, London, 1938 - 72 - assisted substantially by electrical transport equipment supplied by UHRRA. Although the rate of production of Polish zinc and lead ore in April, 1945 was only about ten percent of the combined production of 1937 (from both Polish and ex-German mines), pro- duction figures show steady and encouraging progress and, in December, 1946, output reached 55.9 thousand tons or 52 percent of the prewar level. The rise in ore production at different stages of rehabili- tation can be seen from Table XVI. TABLE XVI Monthly Production of Polish Zinc and Lead Ore, April 1945 - December 1946 Month Output (In metric tons) Prewar (1937) Production (Present Boundaries) 106,500 April, 1945 11,331 December, 1945 39,500 December, 1946 55,930 Source: Ministry of Industry, Warsaw. December 1946 production of lead was 850 tons, 42 percent of the prewar level and 5.3 thousand tons of zinc, 59 percent of the prewar level. This is due partly to shortages of some mat- erials required, but mainly to difficulties in repairing the plant and equipment. Production will gradually rise to theprewar level by 1949. In 1946 Poland exported 4.9 thousand tons of lead and lead products, and 39.4 thousand tons of zinc and zinc products. These were exported to many countries; there is no doubt that, by 1949, Poland will be an important Supplier for all European countries. - 73- Engineering It is not possible, because of the diversified products of the industry, to make a detailed analysis of the extent of destruction of the Polish engineering industry and progress in re- habilitation to date. However, there is sufficient information to present a general picture of the condition of this important industry. The acquisition of the recovered territories has greatly enlarged Poland's engineering capacity. Although a considerable amount of engineering plant was located in prewar Poland this was mainly ancillary to transport and the heavy industries, and the total output of manufactured metal products was not great. On the other hand, in the recovered territories, there was con- siderable engineering and electrical engineering capacity, largely concentrated around lWroc%aw. This should more than double Poland's prewar engineering capacity if completely rehabilitated. W'Jar losses were particularly severe in the engineering in- dustry. Not only was there great destruction of buildings and machine tools during the heavy fighting, but large factories were completely looted of equipment during the German occupation, and many machine tools were carried away as war booty during the period when these territories wvere part of occupied Germany. It is estimated that war losses in the engineering industry in old Poland alone, in the form of buiildings, equipment and supplies, was nearly one billion dollars. Losses in the reQovered terri- tories were even greater. At the end of the war the number of machine tools in Poland was only some 50 percent of prevwar. Des- truction in the city of 11!arsaw alone accounted for a quarter of the loss, owing to the destruction of large factories such as Lilpop, Rau and Loewenstein, Wytwrornia Paroworow, Zaklady Ostro- isecki, and others, including the Phillips plant. Owing to this destruction output was catastrophically reduced, that of machine tools was only some 15 percent of prewar. Because of the importance of machine tools and general engineering for industrial rehabilitation generally, great efforts have been made to rehabilitate the industry. Towards the end of 1945 some machinery and tools began to arrive as a result of reparations and the return of looted machinery. Furthermore, the * utmost use has been made of all remaining damaged equipment which, as far as possible, has been brought back into operation. The follownring factories have thus been rehabilitated: "Ursus" near Pruszkow. Partly restored. Automotive parts. Stowarsznienie Mechanikow, Pruszkow. 40 percent recon- structed. Lathe manufacturing plant. Huta Ludiskow, Lower Silesia. Machinery completely installed. Agricultural implements. Foundry Nowa Sol. Lower Silesia. Castings. Zielona Gora, Sanoka, formerly Zielemonski. 50 percent reconstructed. Freight railroad cars. State Railroad Cars Factory, Wroc/aw. 80 percent of prewar production. Machine industry. Bytomski Zaklady Budowy Marzym Bytom - Bytom Machinery WXorks. Gliwickie Zaklady Budowy Marzyn - Gliwice Machine Construction Works. Zaklady Budowy Marzyn Papierminych i Aparatory Celu- losowy (plinia Joza) - Machine Construction Works. Fabryka Lin i Druta, Zaborc. Cable and wire factory - 75 - Odlewnia Riliwa i Metali, Wroclaw. In operation. Cast iron and metal foundry. Fabryka Obrabierak do Metali, Wroclaw.. Machine tool manufacturing plant. -Fabryka do Obrabiarek do Metali, Raiborz. Machine tool manufacturing plant. Fabryka Obrabiarek do Dnewa, Gdansk. Woodworking machinery manufacturing plant. In the recovered territories production is now some 28 percent of prewar. At present 20 thousand persons are employed in the enTgineering industry.and during the Three Year Plan it is planned to expand the labor force to 50 thousand. A factory will be established in Elblag to manufacture steamship machinery; the buildings for this plant are already available. The WrocXaw railroad car plant will be completely rehabilitated and also the railroad passenger coach factories at Poznan (Cegielski) and Wroc/aw (Tecrana). These will produce 800 freight cars and 30 - 50 passenger coaches monthly, and have considerable general en- gineering capacity. A new railroad car plant called "Zaodrian- skie" rill be built. In Warsaw the locomotive works will be re- constructed and in WrocXaw a plant will be reconstructed to pro- duce heavy machine tools. Additionally, an automotive truck plant wrill be built and a tractor manufacturing plant reconstruc- ted. It is anticipated that the output of machine tools will reach 4,200 in 1947, compared with the present production of 3,600 per annum. Furthermore, an output of agricultural machinery and implements of 25. thousand tons per annum is planned. The greatest difficulties in expanding engineering production are lack - 76 - of ball bearings and roller bearings and lack of certain raw materials. In the railroad rolling stock industry supplies are also a bottleneck; in particular, heavy steel sheets, linoleum and lubricating equipment present difficulties. Owing to lack of machinery only 1,550 tons of steel cables are produced quarterly, although requirements amount to 2,500 tons per quarter. Although it is clear that good progress is being made in rehabilitation by utilizing and repairing all equipment available within the country, it is for this industry that requirements fron abroad assume their greatest importance. Owing to the poor condition of the industry, certain modern machine tools cannot possibly be produced in Poland, and many of the more complex machine tools cannot be produced in sufficient quantity. For this reason supplies of imported key machine tools are vital for the speedy rehabilitation of the engineering industry, on which re- habilitation of the rest of industry so largely depends. Rubber The rubber industry produces for many other industries. Tires and tubes affect transportation and agriculture, belts and conveyors affect mining and metallurgy, tubing affects many pro- cessing industries, insulating rubber affects the electrical industry, and rubber covered rollers affect the printing, textile, and 'paoer making industries. Before the war Poland had a small but expanding rubber industry which, in 20 factories, produced about 15 thousand tons of various rubber goods per annum. Of this quantity approximately 30 percent was exported. Many of the factories were owmed and operated by foreign concerns (principally German); the quality of the materials made was high. The industry used natural rubber - 77 - exclusively, importing thls material from the East through normal commercial channels. The war seriously affected the industry. All of the factories suffered severely from war damage, confiscation, and removal of machinery. Not a single rubber goods factory has reached a pro- duction rate even approximating its prewar capacity. There are 11 factories situated in various parts of the country that were only partly damaged, and in these the machinery has been partially restored and rehabilitated. TwTo factories that were completely destroyed have been party rebuilt and are operating at a very low rate of production. Six faotories were completely destroyed and no rebuilding has started yet; two of these will not be rebuilt. One complete tire factory, with a capacity of six hundred tires a day, was built just before the war. This was removed as a unit to Germany; efforts are, however, being made to secure its return. No additions to the industry were obtained through the transfer of territories from Germany. Most of the equipment in the factories is in very bad repair because of complete lack of maintenance during the war years and because much of the machinery is reconditioned machinery which was partly destroyed or burned. It is imperative that provision should be made for the replacement of machinery which is obsolete, inefficient, or worn out, as well as for new machinery to increase capacity. The present plant capacity is estimated at only 40 per- cent of prewar and some types of materials cannot be made at all because of the absence of special machines. In some cases mach- ines have to work the full 24 hours in order to enable other machines in other phases of manufacture to work eight hours. At the present time Poland is using natural rubber, synthetic, - 78 - and reclaimed rubber, combined in varying proportions according to requirements. Directly after the war Poland received a small quantity of rubber from Russia (taken from Germany), and some quantities of natural and synthetic rubber through UNRRA. UNRRA had planned a total import of natural and synthetic rubber of about five thousand tons; to date only about 1,800 tons have been delivered, and it is expected that the program will realize only two thousand tons. In 1946 about two hundred tons of natural rubber and 1,600 tons of synthetic rubber vwere obtained from sources other than UNRRA. UNRRA has also provided 20 tons of Latex, which is necessary for various types of technical rubber goods. At the beginning of November, 1946 the situation with regard to stocks of rubber on hand was very critical. Based on present rates of consumption, about three hundred tons of rubber per month, stocks on hand were sufficient for about four months' operations. Of the total consumption only about 80 percent rep- resents natural and synthetic rubber, as 20 percent is reclaimed rubber. At the present time there are no synthetic rubber plants in Poland, although it is hoped to have some in the future. The only synthetic rubber plant was in the recovered territories, but it was completely dismantled in the closing stages of the war. Another factor limiting production is the relative shortage of skilled laborers, engineers and technicians. This, in some cases, forces single shift operation, thus, in the factory "Stemil" at Poznan, six hundred workers are employed in the day shift, but only 250 in each of the night shifts. In the last eight months of 1945 production of rubber goods was about seven hundred tons. During 1946 production was stepped up considerably and reaQhed 4,300 tons. This, however, is still - 79 - only 29 percent of prewar levels. Of the total production in 1946 about 1,400 tons, or roughly one-third, represents production of tires and tubes for motor vehicles, tractors and bicycles. Production of bicycle tires and tubes represents more than half of the tires and tubes produced. In 1948 it is expected to manufacture the following quan- tities of the various products: Tires and tubes 5,200 tons Shoes 4,900 '1 Belts and conveyors 1,500 It Tubing 670 " Insulating material and rollers 240 t Various other technical articles 2,390 " Miscellaneous products 3,100 0 Total 18,000 tons The plans of the rubber industry are to expand production in 1947 to over ten thousand tons and in 1948 to 18 thousand tons. In order to achieve these goals it will be essential to provide a sufficient quantity of skilled workers and technicians, an adequate supply of raw materials and rehabilitation and augmen- tation of machinery. The government is making great efforts, by means of scholarships for technicians and training schemes for foreman and superintendents, to ensure no bottlenecks in skilled labor. As regards material supplies, there may be some shortage of cloth fabric and certain chemicals, such as carbon black and accelerators, but, generally speaking, supplies will probably be adequate for the program. Supplies of natural and synthetic rubber will have to be imported, and for this reason it is import- ant that Poland should obtain credits with wrhich to produce these - 80 - supplies, if she cannot buy them with her exports. In the years 1947 to 1950 a synthetic rubber plant will be erected in Poland with a capacity of about eight thousand tons per annum. Another factory is envisaged, producing up to one thousand tons of syn- thetic rubber per annum from alcohol. 20 percent of the rubber, however, must always be in the form of natural crude. Owing to the shortage of machinery for reclaiming rubber a special plant will have to be erected in the near future with a capacity of 1,500 tons per annum, but this will not be in operation until early *1948. The most serious problem is that of machinery and equipment. Much of that in the plants at present is old and worn out. Every- thing has been done to obtain the maximum production capacity from the destroyed and worn out machinery, but it is essential that replacements should now be made, and that the latest machinery and equipment should be obtained to expand capacity. In addition, there is great need for specialized ancillary equipment, such as air compressors, boilers, etc. Most of this new equipment will have to be imported, since it cannot be manufactured in Poland. Chemicals Owing to Poland's increased natural resources in the form of coal, lead and zinc mines, the enlarged iron and steel industry, and deposits of various chemicals in the recovered territories, the chemical industry, which is, in many ways a by-product of heavy industry, has greatly increased in importance. At the same time, Poland's need for fertilizers has expanded, owing to the acquisition of the new territories, where their intensive use is essential, and the general exhaustion of soil fertility throughout Poland during the war. The fertilizer industry is particular has, therefore, assumed great significance. - 81 - Before the war Poland just satisfied her own needs for most chemicals. Only about eight percent of the total value of pro- duction was exported and about the same quantity imported. The following table shows production in 1938 of the principal chemical products:- TABLE XVII Chemicals Production in Poland in 1937 (In metric tons) Dyestuffs 2,000 Ammoniacal Soda 130,000 Ammonium Sulphate 63,000 Calcinated Soda 130,000 (Patent Fertilizers 89,000 Caustic Soda 22,000 (Superphosphates 163,000 Soda Crystals 9,500 Amimmonium Nitrate 2,900 Soap 55,000 Calcium Nitrate 57,000 Zinc White 13,000 Sodium Nitrate 7,300 Varnishes 2,900 Sulphuric Acid Tanning Extracts 5,300 (50"Be') 289,000 Nitric Acid (40"Bet) 101,000 Source: Ministry of Industry, Warsaw The above chemicals were used throughout the industry, part- icularly in the textile industry (dyes) and in the building industry (paints and varnish). Changes in boundaries have had considerable repercussions on the chemical industry. All the potassium deposits have been transferred to the U.S S.R. with no compensatory transfer from Germany; in 1937 production of potassium salts (in terms of K20) was some 71 thousand tons, of which 27 thousand tons were exported. On the other hand, considerable chemical capacity has been acquired from Germany; the following table shows the extent of the gains and the condition of the plants in October 1946:- - 82 - TABLE XVIII Chemical Plants Transferred to Poland from Germany N um be r of Pl ants Total In Under Re- Requiring com- Category Plants Operation construction plete Reconstruction Inorganic Chemicals 7 5 1 1 Artificial Fertilizers 6 2 2 2 Organic Chemicals and Pharmaceuticals 9 5 2 2 Coke By-Products 14 10 - 4 Rubber and Products 3 1 - 2 Fat Processing 8 6 1 1 Faints and Lacquers 5 4 1 - Explosives 3 3 - 9 Pharmaceuticals 3 2 1 - Gases 6 6 - _ TOTAL 64 44 8 12 Source: IAinistry of Industry, Warsaw, 10th January, 1947 The newly acquired industry is based to a large extent on local raw materials such as coal, arsen ores (the only ones in Poland), kaolin, magnesite, plaster of Paris, barium and oil- bearing agricultural crops. Power supply for the industry was produced locally. The major plants now added to the industry are: a) Inorganic Industry and Commercial Fertilizers Goldschmieden Bergius near WrocXaw - compounds of aluminum and crystallic sodium. At present this factory is almost completely destroyed and devastated. I.G. Farben Ind. at Walbrzych - a sulphuric acid factory. Only slightly damaged. Chemical factory at Ubocze. Swidice district - sulphuric acid, superphosphate and flu fluorites. This factory is intact. The Union of Factories "Silesia" at Zerow near Swidnica - sulphurio acid, superphosphate, chloric acid, ultramarine - 83 - earth dyes. In 1944 the factory employed 400 workmen.- The important nitrogen compounds factory at Moscice, which produced 20 thousand tons of pure nitrogen per annum. The only factory of arsen compounds in Poland "Chemical Plants Arsen" at Rowne, Zabkowice district. In 1944 this factory employed about 600 workmen. It has been put back into operation almost completely. b) Dyes and Lacquers Industry Schube-Brukel at Olawa - produces white lead and lithophane Lobecks at Olawa - produces white lead, white zinc and lithophane. Hoffman at Lignica - dyes and lacquers Strahl-Walter at Wroc/aw - produces putty, lacquers, dyes and other chemicals c) Organic Pharmaceutical Industry Scheuric, Pharmabit and Labopharme at Jelenia Gora. Not destroyed and partly working, and Hugold at Lignica and Seifert at Walbrzych. On the whole all the factories of organic pharmaceutical preparations are in good condition, but,unfortunately, larger factories for the compounding of pharmaceuticals are not available in the regained territories. d) Coke By-Products The coLe by-product factories based on the local coal and coke industry are grouped at WValbrzych. Some grades of coal in these territories are exceptionally good for coking. e) There are a number of soap factories in the sou-th-wfestern territories, a rubber-products factory in Jelenia Gora, - 84 - a few factories of industrial gases, a factory of galvanic poles and many others. Some of these factories are in complete working order, others call for reconditioning. Some indication of the additional capacity obtained is that, at present, output of chemicals from the recovered territories accounts for 72 percent of the total Polish output. WNTar damage in the industry was very extensive. Total losses are estimated at some $275 million, of which about $220 million were in the form of capital equipment and $55 million in the form of raw! materials and semi-finished products. Because of the multitude of raw materials involved in each chemical process, and the interdependence of the different branches, this destruc- tion had a magnified effect on production, and the problems of rehabilitation have been particularly intricate in this industry. Recovery to date is best indicated by the following table:- 0 - 85 - TABLE XIX Chemicals Production in Poland 1945 to 1946 (In metric tons) 1 24 5 1 94 6 Juiv December June December Ammonium Soda 3,038 4,312 7.610 7,062 Caustic Granulated Soda 475 820 1,907 1,733 Carbide 1,126 4,388 2,800 2,140 Hydrochloric Acid 329 429 430 368 Peroxide 9 10.6 13 n.a. lMitrates 3,599 5,800 7,159 13,500 Superphosphates 2,170 13,381 8,610 Dyestuffs 27.1 40.9 122 129 Pharnmaceutical Products 1/ 135,672 447,600 1,460,500 n.a. Rubber Product-s l 402,46o 553,567 1n.a. Zinc \T1hite 1 230 443 448 Oil Paints and Lacquers 25 30 89 n.a. Prepared Pitch 1,438 1,185 3,115 4,522 Benzol 912 1,145 1,724 1,946 Oil 1,o46 575 1,0040 n.a. Explosives 512 521 769 n.a. Oxygen 2 105 180 326 415 Acetyrlene 35 56 84 94 Value in Prewar currency in 11,704 17,091 32,090 n.a. thousand zlotys _ Value in U.S. Dollars (1946 prices) 3.65 mn. 5.35 mn. 10.0. mn. n.a. Souroe: Ministry of Industry, Warsaw, January, 1947 j/ In prewaral3 zlotys 2/ Tn cubic meters It is clear that the chemical industry made a rapid recovery; it increased 'by 46percent from July to December, 1945, and by another 128 percent in the next six months. From June, 1946 to December, 1946 it increased only slightly. The greatest recovery occurred in dyes, phaimseuties, ruober, paints and lacquers. The super- phosphate industry, which was inactive during the war, produced - 86 - 85610 tons in December, and production of nitrogen fertilizers now exceeds prewar levels. The electrode factory "Plants" has been completely rehabilitated and is producing for export. Rehabilitation of the important nitrogen compounds factory at Moscice has, however, been held up for essential equipment which is to be returned from Germany. Lack of raw materials has pre- vented the full utilization of the rubber, paint and fat-processing industries while, in the organic chemicals industry, lack of parts and equipment has made it impossible to utilize all avail- able raw materials. Development of the chemical industry is meeting many manpower difficulties. Most of the labor force in the recovered areas was German and, even in prewar Polish territory, the Germans, during the occupation, eliminated administrators, technicians and spec- ialists. There is, therefore, an unusually serious problem of finding skilled Polish technical and manual workers to man the industry. German workers will have to be retained until the necessary Polish workers can be trained. In spite of all diffi- culties the labor force expanded by 118 percent between July, 1945 and June, 1946. Production of chemicals is planned to increase steadily .throughout the four-year plan. The planned production from 1946 to 1949 is shown in Table XX. According to the Plan production will rise, by 1949, to $350 million, a level three times that achieved in 1946 and nearly 20 percent higher than production in prewar Poland in 1937. - 87 - TABLE XXL Chemicals Production in Poland 1946-1949 (In thousand metric tons) Commodity Y1946 1947 19481949 (actual) Bensol 20 55 72 80 Coke 240 560 770 900 Coke Gas (million cu. meters) 113 87 120 135 Tar and Oil Products 90 180 222 258 Coal Electrodes 2.8 7,5 15 28 Explosives 8 9 10 11 Aniline .62 .63 .75 .86 Dyes 1.1 1.6 1.83 2 Formaline .2 1 1.5 2 Eitrogen Fertilizers 180 180 410 410 Superphosphate Fertilizers 210 360 400 400 Enriched Phosphates - - 40 100 Calcium Saltpetre - 42 100 Termo-Phosphates 80 80 Oil and Mineral Paints 3.8 7 20 32 Oxygen (million cu. meters) 5 7 8 9 Acetylene .72 .85 1.1 1.2 Chromium Salts .19 .50 .80 1.2 Carbide 31 70 70 70 Sulphuric Acid 100% 44 92 92 92 Hydrochloric Acid 10 12 13 15 Anmonia Soda 100 135 180 200 Caustic Soda 18 40 65 90 Soap 6 15 18 42 Powder for Washing 10 15 20 24 Tires 1.13 2.98 5.83 7 Artificial Leather - 0.30 0.55 0.70 Liquid Chloride 1 2.8 4.5 7 Peroxide .18 .60 .90 1.4 Total Value of Production in Millions of Dollars 110 160 230 350 Source: Ministry of Industry* Warsaw, January 1947 - 88 - Textiles Prewar Production - In prewar Poland textile production vwas organized for the domestic market; imports and exports were a small Dart of total turnover. Thus, during the period 1933 to 1937, of an average annual production of 71,799 metric tons of cotton yard, only 532 tons were exported and 1,178 imported; similarly out of an annual average output of 29j444 tons of woolen yarn, only 1,279 tons were exported and 603 tons imported; again out of an average annual production of 5,045 tons of rayon yarn, * only 418 tons were exported and 466 tons imported. The following table describes the size and composition of the Polish textile industry before the war:- TABLE XXI Polish Textile Mills Employing more than Five Workers, 1937 Number of Average Number Establishments of Vorkers Multi-Department Mills 129 72,740 Spinning Mills 139 25,164 Weaving Mills 949 27,403 * Knitting Mills 445 9,417 Dyeing Works 171 8,328 Other 551 14,015 TOTAL 2,384 157,067 Source: Concise Statistical Year Book of Poland, London, 1941, p. 62. In addition to the above, production mws carried on in large number of small establishments employing less than five persons. For example, in 1935, of a total of 9,376 Polish textile estab- 21/ I t was lishments, no less than 6,858 were in this category. I 1/ Concise Statistical Year Book of Poland, Warsaw, 1939, p. 97. - 89 - these businesses which wiere the most adversely affected by the war for they were ovvned and staffed mainly by Jewish workers decimated by the Germans through mass deportations and executions. A stuimary of Polandts total prewar textile production by main categories of output is given in Taile XXII. War Losses - As compared with those of other industries, war damage sustained by the Polish textile industry during the war were light; nevertheless, destruction of textile machinery and damage to plant wriere such that extraordinary measures are necessary if production is to be brought back to normal. Replacement cost of destroyed machinery alone is estimated at approximately 140 million U.S. dollars and replacement cost of destroyed plant at approximately 30 million dollars. 2/ Tnz. Czeslaw Babinski, "Textile Industry" in Economic Life, Warsaw, May 29th, 1946 Mr. Babinski is Vice-President of the Central Administration of the Textile Industry in the Ministry of Industry, Warsaw. - 9o - TABLE XXII Poland's Prewrzar Textile Production - 1937 (In metric tons) Commodity Yarz Cotton (finespun and shoddy) 77,500 Woolen 34,200 Flax 8,100 Jute 114,000 Rayon 6,500 Other 4,300 TOTAL 144,600 Fabrics Cotton and Cotton-Shoddy 51,500 Woolen and Mixtures 20,900 Raw and Rayon Silk, half Silk 2,800 Linen 5,800 Jute and Sacking 11,800 Other 2,500 TOTAL 95,300 Knitted Goods and Haberdashery Knitted Underwear 1,198 Other Knitted Goods 1,909 Haberdashery 1,097 TOTAL 4,204 Stockings, Socks and Gloves Stockings and Socks 2,627 Gloves 167 TOTAL (in thousand dozen pairs) 2,794 Other Textiles Carpets 1,582 Ropes, Belting, Twrine 3,435 Laces and Curtains 621 Thread 1,343 Cotton Wlool 2,343 TOTAL 9,324 Source: Concise Statistical Year Book of Poland, Warsaw 1939. - 91 - These figures refer only to the prewar area. The losses of mach- inery and plant in the territories acquired from Germany, while difficult to assess accurately, are roughly estimated at 60 mill- ion dollars. The industry was unscrupulously exploited during the war and essential repairs were not made, with the result that the machinery requires extensive repairs, Moreover, much of the equip- ment is obsolete and requires immediate replacement. The bottle- neck in hoth the cotton and woolen industries is in spinning capacity. Present Potential - In 1945 Poland's textile industry was substantially enlarged through the addition of several large manufacturing establishments located in the territories acquired 1/ from Germany - Statistics showing prewar capacity and production of the textile industry in the recovered territories are unfortunately not available; it is consequently impossible to assess accurately the Drewar production capacity of the area covered I-,y present-day Poland. The number of spindles and looms possessed by postwar Poland as compared with Poland in 1937, however, is showm in the 1/ Langenbielau with branches at Tannenburg and Gellenau which owrned 55 thousand spindles and 6,500 looms; the important "Deutsche 'WYollonwaren Manufaktur A.G." at Grunberg and "Con- cordia Spinnerei and Weberei" at Markliza with a branch at Bunzlau; the following linen manufacturers; the "Erdmannsdorfer A.G." at Zillerthal-Ermannsdorf, the "Mechanische Weberei Landeshut" at Landeshut, and the "Mechanische Weberei Lauban A.G." at Lauban: the two important jute textile firms "Vereinigte Jutespinnereien und Vlebereien A.G. at Ostritz and "Max Bahr A.G." at Landsberg/YVarthe, the latter with 14 thou- sand sDindles and 750 looms; and the following firms engaged in the manufacture of rayon and staple fibre: the "Schlesische Zellwelle A.G." at Hirschberg (annual capacity of staple fibre 21 thousand tons), the "Zellwolle und Zellulose A.G.t1 at Kustin (annual capacity of staple fibre 18 thousand tons), and the Vereinigte Glanzstoff Fabriken A.G." at Breslau. See Germany Basic Handbook, Section NT and 0, Foreign Office and 11TITI-1tl oi Economic l'Yarfare, Lon6on,i January 1945. - 92 - following table:- TABLE XXIII Spindles and Looms in- Poland: 1937 and December, 1946 Spindles Looms 1947 December 1946 1937 December 1946 (old boundaries) (new boundaries) (old boundaries) (new boundaries) Cotton 1,925,500 1523,134 46,200 45,221 Wool 826,200 699,184 11,500 7,342 Flax (linen) 43,300) 2,100) Jute 27,200) 160,420 1,700) 9,153 Xemp 4,300 100) Silk 4,400 5,380 2,400 5,674 TOTAL 2,830,900 2,388,118 64,000 67,390 Sources Concise Statistical Year Book of Poland, Warsaw, 1939 and Ministry of Industry, Warsaw. Considering Poland within its old boundaries, the removal and destruction of spindles has reduced Poland's original spindle capacity by 42 percent. The existing spindle capacity of the 250 textile mills acquired from Germany has been included in the 1946 statistics in the above table. Even allowing for these newly ac- quired spindles, Poland's existing spindle capacity is still 15 percent below her prewar level. On the other hand there has been a net increase in the case of looms; Poland has 105 percent of the prewrar number of looms with only 85 percent of the prewar number of spindles. For this reason an increase in the number of spindles in o-oeration is the major problem involved in expanding production. lWhile the acquisition by Poland of the additional textile mills in the ex-German territories has augmented the potential productive capacity of the Polish textile industry, it has in- creased the problem of reconstruction and rehabilitation. Because of the additional 250 textile factories in the ex-German terri- tories the Polish Government's Central Administration of the -93- Textile Industry will have a difficult problem in its present endeavors to concentrate the existing machinery in the most pro- ductive mills. It is possible that certain uneconomic plants may be closed. It may also be necessary to expand the textile engin- eering industry considerably, or to import looms and spindles from abroad. Most of the machinery in Polish mills is of foreign manufacture and there is urgent need for the import of spare parts Wherever these cannot be manufactured in Poland. The Polish textile industry has made considerable progress in restarting spindles and looms. Since liberation the proportion of available cotton spindles in operation increased from 8 percent in March, 1945 to 68 percent a year later and 75 percent in December 1946. The corresponding percentages for cotton looms are 16, 52, and 59. The figures for March 1945 refer only to the prewar area of Poland, while the 1946 figures are for postwar Poland. The following table compares the amount of textile machinery available and actually operating on December 31st, 1946:- TABIE XXIV Textile Machinery Available and at Work in Poland December 31st, 1946 Spindles Looms Available W'Yorking Available Working Cotton 1,523,134 1,054,651 45,221 26,674 W'Vool 699,184 430,333 7,342 5,108 Flax; Hemp, Jute 160,420 108,577 9,153 4,377- Silk 5,380 4,014 5,674 2,481 TOTAL 2,388,118 1,1r598,$075 67,390 38,640 Source: Ministry of Industry, IrWarsaw. - 94- Some idea of the progress made in yarn and fabric production can be gleaned from production figures for the period March, 1945 to December, 1946:- TABLE XXV Average Monthly Textile Production in Poland, 1937, 1945, and 1946 (In metric tons) 1937 1945 1945 1946 1946 2nd Quarter 4th Quarter 2nd Quarter 4th Quarter Cotton Yarn 6,458 899 1,960 3,569 4,759 Woolen Yarn 2,850 458 1,084 1,354 1,923 Bast-Fibres 1,842 74 271 826 768 Cotton & Cotton-Shoddy Fabrics 4,292 652 1,854 3,020 3, 640 Woolen Fabrics 1$742 307 683 940 1,360 Source: Concise Statistical Year Book of Poland, Wfarsaw, 1939 and Ministry of Industrys Warsaw The above table shows that rapid progress has been made in rehab- ilitating the textile industry. Production in the fourth quarter of 1946 wmas running at a level about 5 times the production in the second quarter of 1945. In the course of the year 1946 pro- duction was speeded up by about 100 percent. The level of pro- duction is however, still far below prewar levels; thus, output of cotton fabrics is only 85 percent of prewar and that of woolen fabrics only 78 percent. Nationalization and Future Plans - Poland's textileindustry was nationalized on 3rd January, 1946 and is now administered on behalf of the Government by the Central Administration of the Textile Industry, which is part of the Ministry of Industry. The Central Administration works through 18 different departments and - 95 - sic directorates organized on a functional basis as follows:- cotton. wool, knitted goods, bast-fibres, silk, clothing, &nd millinery. Individual mills are usually organized into associat,ions which are in turn controlled by the directorate for the industry. Some plants, especially the larger ones, remain outside the associations and under the direct control of the directorate. The Central Administration of the Textile Industry which controls not only textile manufacturing but also the making of textile machinery, has its own selling organization. The Four-Year Plan of Economic Reconstruction provides for a rapid increase in textile production and corresponding expansion in import of raw materials and exports of finished textiles. Planned imports of textile raw materials are shown in the followJing table:- TABLE XXV I Polish Imports of Textile Raw Materials Planned for 1947 1949 (in thousand metric tons) * Actual P 1 a n n e d 1946 1947 1948 19419 Cotton 41.3 70 92 115 Wool & Waste 19.2 42 51 77 Flax 7.02 14 26 36 Jute 5.3 6 14 17 Cellulose (Viscose) 13.3 16 19 22 Source: Polish National Economic Plan, Central Board of Planning, Warsaw, 1946. The value of the imports required in 1947 is 135 million dollars. It is interesting to note for purposes of comparison that in 1938 Poland's cotton imports amounted to 79 thousand tons valued at 22 million U.S. dollars; woolen imports were 27 thousand tons valued at 18 million U.S. dollars. - 96 - Planned production for 1947 to 1949 is shown in Table XXVII. TABLE XXVII Planned Textile Production 1946 - 1949 Actual Production Planned Production 1946 1947 1948 l949 Fabrics (Million meters) Cotton 212 300 340 400 Woolen 21 32 45 60 Bast 33 52 60 74 Silk 7 9 14 16 Hosiery (thousand tons) 3.3 4.0 6.0 9.0 Artificial Silk Yarn (thousand tons) 3.5 5.3 7.2 8.6 0 Cut Artificial Fibres (thousand tons) 5.0 7.2 8.4 9.0 Sythetic Fibres (tons) 0 5 20 100 Source': Ministry of Industry, W,11arsaw and Provisional Basic Figures of the Plan of Economic Reconstruction TABLE XXVIII Exports of Textiles from Poland 1946 - l949 Actual P l a n n e d 1946 1947 1948 1949 Cotton Fabrics (in million meters) 36 60 80 100 Woolen Fabrics " 0.7y 5 6 8 ILinen Fabrics it 4 16 18 20 Rayvon Fabrics 1.7 2.0 2.3 Haberdashery 13 25 30 35 Plush " 0.38 0.45 0.52 0.60 Carpets (in thous. sq. Meters) 30 60 74 90 Knitted Goods (in million pieces) 1.6 3.0 3.5 4.2 Clothing 0 0.5 3.56 3.8 4.lO Rayon (in metric tons) 181 600 750 850 Source: Ministry of Industry, Varsaw. - 97 - The approximate value of planned textile exports in UIJ3.. dollars is as follows: TABLE XXIX A-on-roximate Value of Textile Exorts Planned for Poland 19417 - 19419 (in thousands of U.S. dollars at 1946 prices) 1947 1948 1949 Cotton Fabrics 18,160 241,000 30,000 Woolen it 11,520 13,700 17,000 Felt 48o 530 600 Flax Fabrics 14,445 16,500 18,000 Knitted Goods 1,507 1,800 2,200 Rayon 2,320 3,000 3,000 Clothing 9,000 9,700 10,400 Haberdashery 90 108 130 Plush 904 1,060 1,300 Rayon FabriQs 1,020 1,200 1,380 Carpets 375 460 550 Other 2,360 2,700 3,100 TOTAL 62,181 74,758 8y,-66o Source: Ministry of Industry, Warsaw In the year 1947 Poland's exports of textiles will be sufficient to pay for about 416 percent of the planned imports of textile raw materials. - 98 - Construction Industry Before the war housing in Poland was inadequate, particularlS in the east. In rural areas the average number of persons per room was about three, while in urban areas it was two. Over half of a sample of adolescents were sharing a room with three or more other persons. The war, therefore, accentuated what was already a serious housing shortage. War losses in buildings alone amounted to some three billion dollars in urban areas, and to over 800 million dollars in rural areas. In the old territories 0 about 21 percent of the housing in towns and villages was des- troyed. In the recovered territories destruction vwas even great- er; over 65 percent of the accommodation was destroyed or damaged. The total losses amounted to 3.3 million rooms. In addition to these war losses there has been the inevitable normal wastage and serious postwar losses of damaged buildings due to prolonged exposure to the elements. Owing, however, to the re- duction of over 30 percent in the size of the Polish population (i.e. 11 million persons) there is no serious overall deficiency in housing, but owing to the fact that the destruction is con- centrated in certain areas and certain towns, there is at -present in such towns as Warsaw, an acute shortage of accommodation. In other areas, particularly in the recovered territories, where resettlement is taking place, there is at present a surplus of housing. Owing to the priority afforded to rehabilitation of trans- port and industry, there is little labor available for the con- struction industry and the whole Four Year Plan provides for the construction of only 320 thousand dwelling rooms in cities, and 325 thousand rooms in rural districts, although it should not be - 99 - overlooked that, at the same time, there will be an enormoras program of demolition of ruined buildings. Even this small program of reconstruction will present diff- iculties. The labor force in the construction industry in 1946 wqas only 97 thousand workers, including skilled, unskilled, tech- nical and administrative personnel. By 1949 this labor force wil" have to expand to 326 thousand. The number of skilled workers will have to be more than doubled; obviously the achievement of the Plan will depend on effective training of workers on this large scale. In the building materials industry the labor force also has to expand rapidly, from 47 thousand to 86 thousand, and the same problems of labor supply will arise. Supplies of building materials will also cause difficulties. Although there is no shortage of bricks in some areas, owing to the large quantities of bricks available from ruined buildings, there will be an overall average of bricks thoughout the Plan. Production in 1.947, for example, is only 600 million bricks, whereas requirements are 728 million, and in 1949, although pro- duction will rise to 1,400 million, requirements will have risen 1 to 1)466 million. There will thus be a slight deficit throughout the Plan. Production of cement is adequate throughout the Plan; in 1946 380 thousand tons were exported and it is exDected that in 1948 and 1949 exports will continue, though on a much reduced scale. Thus, for the whole of the three years 1947 and 1948, production is 5.05 million tons, ihile requirements are 4.88 million tons. There are, however, serious deficits in structural steel and timber. Although production of rolled steel products as a whole rises from 800 thousand tons in 1946 to 1.5 million tons in 1949, total requirements rise at even greater speed, and - 100 - There will be a deficit in each of the year 1947 to 1949, rising to 355 thousand tons in 1949. Although reconstruction require- ments are a small percentage of total requirements and amount to only 250 thousand tons over the whole period, some difficulties will arise in procuring this material. The most serious deficit, however, will arise in the case of timber; the Ministry of Recon- struction requires 5.6 million cubic meters out of total require- ments of 15.7 million cubic meters in 1947 to 1949. Production, however, will amount to only 13.3 million cubic meters, leaving a serious deficit. The deficit will reach its peak in 1949, during which year there will be a need for imports of one million cubic meters. As regards equipment for the industry, it should be pointed out that at present the industry is operated with practically no modern construction equipment, relying almost entirely on hand tools and simple methods of construction. UNFRA has supplied certain quantities of earth moving equipment, concrete mixers, and pneumatic tools, but the industry, generally, is still in need of considerable supplies of modern construction equipment. The above summary of the present situation in the con- struction industry shows that, although the construction pro- gram is extremely modest, it will present difficulties, mainly in labor and raw material supplies V. UNRRA ASSISTANCE The foregoing account of the condition of some of Poland's basic industries shows clearly that, at the end of the war, industrial rehabilitation presented a formidable problem to the Polish Government. War losses and destruction were on such a vast scale that, in formulating realistic plans, the Government - 101 - had to draw up programs of rehabilitation extending, in most cases, for over five years, and, in some, from ten to 15 years. Since Poland had practically no 'foreign assets, rehabilitat- ion -oresented a serious problem. Agricultural and industrial production were running at only a fraction of prewiar levels, and it wras obvious that rehabilitation through Poland's ovn unaided efforts would have been painfully slow, if not altogether im- possible. Clearly outside aid was required either in the form of gifts, such as UNRRA operations and voluntary relief, or in the form of loans. The Polish Government, therefore, applied for UNRRA assistance. Owing to many delays, however, it was not until September 17th, 1945, that a basic agreement was concluded with the Administration and not until 1946 that supplies for industrial rehabiliation began to arrive in appreciable quantities UNRRA assistance, therefore, did not arrive until industrial rehabilitation in Poland was already well under wlray; it certainly played a negligible role in building up Polish industry during 1945 when the most rapid rehabilitation occurred. UNRRA Program of Assistance In view of the tremendous losses borne as a result of the war and of the country's extremely limited resources, UNRRA lwias quick to grant Poland substantial assistance and formulated the Polish program of relief and rehabilitation, the largest in Europe. UNRRA's program of operations in fact amounts tbo 481.3 million U.S. dollars. Expenditure of this sum is distributed as follows:- - 102 - TABLE XXX Program of UERIA Assistance to Poland Categories of Aid Amount (In millions of U.S. dollars) Food, Feed and Soap 201.52 Clothing, Textiles and FootWear 82.7 Medical and Sanitary Supplies 25.8 Agricultural Rehabilitation Supplies 75.9 Industrial Rehabilitation Supplies 95.34 Total 481.26 Source: Bureau of Supply, Washington, Program of Relief and iRehabilitation Supplies. The character of the commodities supplied and the timing of deliveries has been determined, within the limits of available supplies, by the practical requirements of the relief and rehab- ilitation operation. About $92 million was brought in by the end of 1945, another $306 million was delivered in 1946 and the balance, about $83 million, came in during the first half of 1947T. In the first period of UNEEA assistance, relief was provided mainly in the form of food, food products and clothing - items reqtuired to ensure at least a minimum standard of life to the civilian population during the winter of 1945 and to enable them to devote their energies to rehabilitation of their country. In the absence of precise information as to the state of Polish railways, ports, roads and as to the condition of the country's industries, the Administration was unable to assist immediately in the rehabilitation of transport and industry. However, as soon as the Polish Government's preliminary statement of require- ments had been received and the Agreement betvreen the Government and and Administration had been signed by the temporary UNRRA delegation to Poland, in September, 1945, the Administration's - 103 - industrial rehabilitation program vas worked out and approved. Unfortunately, procurement difficulties prevented early del-1ivery of industrial rehabilitation supplies, particularly machine tools and equipment, production of vwhich requires many months. Of the total of $95.3 million for industrial rehabilitation ,/ supnlies some $57-lf million was used for transport rehabilitation and t7.6 million for liquid fuels and lubricants; thus transport rehabilitation supplies accounted for 69 percent of the budget. In addition to the $30.1 million which remained for rehabilitat- ion of industry proper, some $38.41 million were set aside in the clothing and textile program for the supply, to the Polish clothing and footwear industry, of such indispensable raw mater- ials as raw cotton, raw wool, cotton and wool yarns and leather for shoes. The total UNRRA assistance to Poland in the field of Trans-ort and Industry is siunmarized in the table helow:- TABTE XXXI UNRiPR Program of Assistance to Polish Transport and Industry 1J 0 Million U.S. dollars Transport (Road, Rail and Water) 58.28 Fuels and Lubricants 7e59 Industry: 67.87 Raw Materials for Textile and Footwear Industries 38.42 Materials, Chemicals and Engineering Stores 9.66 Machine Repair Shops 4.90 Mining and Quarrying Industry 7.17 Building and Construction Industry 2.82 Public Utilities and Services 2.92 / Processing equipment 10 04 Other Programs 0.94 TOTAL 133-74 1/ including raw materials in clothing and textile program. 2/ Includes 243.000 dollars telecommunications equipment. Source: UNRRA Mission to Poland l/ For a full discussion of Poland's transport rehabilitation pDrollems and UNRRA's contribution to their solution, see T UJNRRA ruropean Regional Office, Transport Rehabilitation in Poland, Operational Analysis Paper No. London 1947. - 104 - The first charge on UN\RA industrial assistance was the pro- vision of raw materials and semi-finished products such as raw cotton, raw wool, various metals and semi-finished metal products provided to enable what was left of Polish industry to start the flow of production. The total supplies of this nature amounted to $48 million and undoubtedly made a most valuable contribution to Poland's recovery. Next in urgency and importance was assist- ance in the field of transport, including liquid fuel, which totalled nearly $66 million. It is certain that, had not trans- portation in Poland made such a firm recovery, industrial rehab- ilitation would have been seriously delayed. By applying the bulk of its effort to transport rehabilitation, UNRRA, therefore, undoul'tedly contributed most effectively to industrial rehabili- tation generally. Nearly all the remaining assistance, some $20 million, was in the form of equipment for public utilities and industry. Less than $4 million was in the form of spare parts and semi-finished products for industry. It is most important that UNRRA's assistance in actually rebuilding and re-equipping Polish industry should not be over- estimated, Compared with the volume of destruction, estimated at some $5. 700 million, and the vast needs for replacement of obsolete equipment, $20 million is an insignificant contribution to the investment required to rehabilitate industry. Nevertheless the program represents e' «pment which wJas vitally needed and which5 in many cases, could not possibly have been manufactured in Poland. It, therefore, played a part in rehabilitation out of all proportion to its size; it enabled branches of industry to make progress otherwise impossible of achievement, and it enabled Poland to bring into operation existing plant and equipment which - 105 - vwould have lain idle. In particular, UNRRA assistance in setting up repair shops was vital, and has enabled Polish industry to proceed with the gigantic task of salvaging useful equipment at a much faster pace. UNRRA supplies arriving in Poland have been used by the Polish Government with skill and ingenuity so qs to achieve the maximum possible usefulness; very gratifying results have been obtained in spite of the extreme hardships under which the whole economy is operating. Assistance in Raw Materials Textiles and Footwear - UNREA assistance in the form of raw materials was most important in the textile and footwear indus- tries, since these industries wuere, compared with most other industries, not badly damaged during the war and required only raw materials in order to begin producing urgently needed clothing and footwear for the population. As textile machinery was repaired and reconditioned, further supplies of materials had to be imported from the U.S.S.R.; in exchange a proportion of the finished output was exported. The following table shows the assistance in detail:- - 106 - TABLE XXXII UNRRA Raw Materials for the Textile and Footwear Industries Quantity Value (in metric tons) (in U.S. dollars) Raw WVool 23,887 1801042,000 Raw Cotton 30,234 14,492,000 Woolen Yarn 317 1,129,000 Cotton Yarn 35 43,000 Jute 18600 oo Upper Leather 401 803,000 Sole Leather 1,377 1,147,000 Hides 862 443,000 Miscellaneous Textile Materials 1,071 1,o86,ooo Miscellaneous Footwear Materials 1,381 836,000 Unprogrammed Balance 4o00,000 * TOTAL 785165 2/ 38,1421,000 3/ 1/ Of this 12 thousand tons wias lost or damaged by fire on board ship. 2/ Excluding unprogrammed balance. E1 Excluding jute. Source: Bureau of Supply, Washington, Program of Relief and Rehabilitation supplies. MostG of the cotton, and about one third of the wool, were de- livered in 1945 and the balance in the first half of 1946. All stocks of UNRRA wool and cotton are now exhausted and Poland must buy in the world market or arrange deliveries through barter arrangements, such as that with the U.S.S.R. Jute products are being produced but raw materials are the bottleneck, consequently reconditioning of the equipment, which is practically all English and badly in need of spare parts, is proceeding only as materials become available. Other Industries - Assistance to other industries consisted of sup-lying about 30 thousand tons of critical raw materials, semi-fabricated and fabricated materials, chemicals, and supplies to a total value of $8,851 million. A breakdown of the program according to classes of materials is given in the followrirng tabulation: - - 107 - TABLE XXXIII UNRRA Industrial Raw Materials, Chemicals and Supplies Commodity Metric Tons U.S. Dollars Ferrous, Raw and Semi-Fabricated 1,720 272y2400 Ferrous Fabricated 1,440 350,980 Tin 710 1,050,331 Copper 7,280 2,00o4,723 Lead 40 4^937 Other Non-Ferrous 3,110 1,342X,100 Other Ferrous Fabricated 200 122,130 Chemicals 6,200 1,050,000 Ru'ber 1,830 950,000 Lumler 10 813 Belting 90 277,192 Canvas Products 270 360,450 Packing Materials 30 72,944 Unclassified 7,200 1,755,000 TOTAL 30,130 9,656,ooo Source: UNRRA Mission to Poland Copper was provided not only to enable Polish industry to produce copper wire, sheet, etc., but to facilitate the develop- ment of electric power in Poland to support the further develop- ment of industry generally. In the case of belting and packing the material was very necessary to keep equipment operating. Cenvas products provide, fQr the major part, tarpaulins for protective purposes in the handling and storage of cargo. The other items - various materials, tin, lead, non-ferrous items, chemicals, rubber, lumber (plywood), and not easily classified items - include basic items essential to production. In the case of ferrous materials the items are principally structural steel and hardware. In addition there are important alloys such as ferro-molybdenum, ferro-chrome, ferro-phosphorus, ferro- silicon, and titanium carbide, all essential in the metal work- ing industry which is so important in the reconstruction and - lo8 - rehabilitation of Poland's industry. This program for materials, chemicals and supplies, though comparatively small, provided many qf the minor items required over the whole range of industries in Poland. In many cases procurement would have been impossible without the aid of UNRRA. Many minor problems vwere solved which, considered as a whole, could have seriously held back industrial recovery. Assistance in Equipment With only a small allocation to industrial equipment it was necessary to concentrate supplies on certain key industries and * on certain bottleneck items in these industries. Attention was concentrated first on those industries which would serve to pro- duce and repair equipment to further the more rapid rehabilitat- ion of Poland's industry from indigenous sources. This is a field referred to as "Machine Repair Shops" l/. Secondly, equip- ment wlas provided for coal mining, the backbone of Polish in- dustry, and for the re-establishment of petroleum production by deeper drilling, a development due to the depletion of fields * during the war period. Thirdly, funds were provided to mechanize reconstruction operations, primarily in the building and con- struction industry. Fourthly, funds were provided to rehabilitate electric power plants and distribution systems to provide power for industry, with limited funds for water supply, gas and sewage, and telecommunications. Fifthly, assistance was provided for various processing industries to ensure delivery of critical 1/ Locomotive and rolling stock repair shops and motor vehicle repair shops viere also provided, but these are dealt with in: TJNRRA European Regional Office, Transport Rehabilitation in Poland, Operational Analysis Paper No. London 1947. - 109 - items required in those industries, and to provide for re- establishment of some capacity destroyed during the war. The program is summarized in the following table:- TABLE XXXIV UNRRA Equipment Supplied to Polish Industry 1/ Machine Repair Industry Machine Repair Shops 4,904,000 4,904,000 Lining Coal Mining 5,867,000 7,167,000 Oilfields 1,300,000 Building and Construction Industry General Construction Equipment 2,267,700 2,815,000 Lumbering and. woodworking 236,500 Hand Tools 320,800 Public Utilities and Services Electricity 2,412,000 2,921,000 Waterworks 197,800 Gas 18,400 Sewage 49,800 Telecommunications (excluding 243,000 railway communications) Processing Industry 1,045,000 TOTAL 18,852,000 1/ Programs for suo-divisions of main headings are approximate Source: UNRRA Mi.ssion to Poland Machine Repair ($4,904,000) This program supplied sufficient equipment for 14 complete stationary machine repair shops (small, medium and heavy), four stationary electrical repair shops and 22 mobile machine work- sho-s, and supplemented installations in existing shops as well as establishing new shops. A major portion of the miscellaneous machine tools included in this program went to the metal working industry for rehabilitation of damaged equipment and production - 110 - of new tools for industry generally. Mining ($7,167,000) The assistance rendered to the mining industry in Poland has been concentrated on the coal industry and the oil industry. Coal, as was explained earlier, is the basic industry in Poland not only because it is the driving force behind the whole in- dustrial output, but also because coal exports produce two-thirds of the foreign exchange (or $200 million) which Poland hopes to obtain from her foreign trade in 1947, and which she must use to purchase vitally needed raw materials. Oil is another important industry, largely because oil is an expensive import and, with an oil industry now inadequate for all Poland's needs, the more oil produced at home the less need be imported. UNERA assistance in coal mining has not been great. The following table shows its extent:- TABLE XXXV Major UNRRA Eouipment for the Polish Coal Mining Industry Value (in U.S. Dollars) Loaders and Slushers (58) 315, 000 Coal Cutters (45) 276,900 Conveyor Belting (77,500 ft.) 1,282,000 7Nasheries (Steam Locomotives (15) 4440,000 Electric Locomotives (20) 206,600 Turbocompressors (1 42,300 Com-oressors (31) 35,300 Pump-s and Turbines (31) 48,oo0 Charging Stations (12) 18,000 lVeasuring and Registering Instruments and Laboratory Equipment 389,700 Ru.bber Hose (488 thousand ft.) 99,300 Drill Steel (1,300 sets) 8,000 Source: UNRRA Mission to roland In addition to these items UNRRA delivered 15 thousand - 111 - miners' lamps, 40 thousand pairs of miners' boots and shoes, and five thousand suits of miners' clothes. IJnder the UNBRRA program, materials, replacements and spares necessary for the re-establishment and maintenance of production from Polish oil fields is being provided. Originally production in the Polish fields came from shallow horizons, but, due to depletion during the var period, it is necessary that exploration and development be carried outin the deeper horizon. Equipment availab)le in Poland still in operating condition was not suitable 4- for these deeper developments, and therefore UNRRA has provided modern rotary drilling equipment. Building and Construction ($2,815,000) Because of the tremendous destruction of buildings in Poland, industrial rehabilitation has involved abnormally extensive building and construction vrork. Accordingly, the UNRRA program aimed at providing Poland with basic tools and some of the modern equipment necessary to assist the industry. 4 Equipment and supplies have been furnished for the lumbering industry, woodworking industry, and for general construction; hand tools have been supplied for all types of crafts in the industry. The lumbering and woodworking industry has received approximately 240 different types of tools and machines, totalling approximately 50,000 pieces, including tractors and equipment for felling trees, cutting logs in the forest and log handling. It has also obtained numerous items for mills and shops engaged in processing timber. The general construction industry has received 2,140 units including heavy construction equi-oment such as bulldozers, graders, carryalls (scrapers), - 112 - mechanical shovels, cranes, pile drivers, rollers, rock crushing plants, and general construction items such as welding machine compressors and concrete mixers. This total includes 63 different types of equipment, valued at approximately $2,268,000. Hand tools valued at approximately $300,000 included 225,000 pieces consisting of 57 different items; these included forges, hammers, saws, shovels, hoes, tools for carpenters, masons, blacksmiths, mechanics, metalsmiths and other general craftsmen. Public Utilities ($2,921,000) The most valuable contribution to the rehabilitation of public utilities was in the form of electric power equipment; one 650 Mu (steam) and one 600 T,MJ (diesel) generating units, together with transformers and switchgear equipment accounted for half of this program. In addition scarce equipment like elec- trical instruments, rectifiers, gas meters and cesspool emptiers were provided. Steam power and diesel power electric generating plants furnished by UNRRA are set up in approximately ten different tovms and villages in Poland bringing electric lights to a population of over 150 thousand people, and providing power for such industries as flour mills. draftsmen shops, woodworking shops, textiles, etc. In some cases the communities would not otherwise be served with power, in other cases UNRRA equipment supplements the partially rehabilitated plants which were des- troyed during the war. in at least two cases these plants serve mining operations for the production of coal and iron ore, and in one case the plant assists in de-watering extensive areas flooded due to wartime destruction of dams and flood control facilities. - 113 - Transformers and accessory equipment sufficient to handle approximately 20 percent of the prewar installed power will play an important part in the re-establishment of Poland's power supply and distribution. In addition there are 15 transformer substations having a total capacity of 8000 kva, for installation in the Warsaw and Krakow areas. These are stations which make possible the use of power delivery to these areas over high voltage lines. To re-establish service on the Warsaw tramway, rectifier substations have been supplied, which increased the postwrar power capacity by 60 percent to 8000 kw. However, the supplyJ of power thus established is still less than 50 percent of the prewar capacity of 18 thousand kw. Processing (1,0l45,000) A miscellaneous group of small equipment, spare parts and chemicals constitute assistance to the remainder of Polish in- dustryr, mainly the textile, leather and sugar refining industries. The bulk of the assistance goes to the textile industry in the form of chemicals and dyestuffs, viscose spinning jets and cards. Technical Assistance After six years of wnar, during which Polish technicians were prevented from maintaining their technical skill and ignor- ant of new developments, there is an urgent need for technical advice in many industries. Within the limits of the UNRRA budget efforts have been made to assist Poland in overcoming this handicap. As a part of the mining program UNRRA has provided consult- ants, who came to Poland, studied conditions in the mines, in the coal preparation plants, and in the coke and coke by-products industry. They prepared comprehensive reports advising the - 114 - industry on underground mechanization of mining with special reference to the particular conditions existing in Polish mines. They also advised on installations of coal preparation plants and methods of operation of existing plant. In the coke and coke by-products industry the advice wnas primarily on methods of mod- ernizing the industry, and the most logical consolidation to ensure more economical operating units. In addition advice has been provided on specific mechanical devices being provided in the UNRRA program for coal mining operations, such as mine car loaders. UNRQA furnished to Poland a consultant on mass production of items made from steel wire, bars and forgings such as nuts, screws, nails, etc. He studied the various plants in Poland producing such items, made recommendations for consolidation and modernization of equipment, and advised on methods of in- creasing production. A consultant assisted Poland in the setting up of the steam electric power plants. These consultants and those on the mining program, six in all, have been furnished under what is designated as "Industrial Rehabilitation Services". Under that same program $100,000 was expended to provide Poland with various types of technical equipment, including maintenance and operating manuals, technical books, and instructional and educational films in the various technical fields. In addition, UNRRA under a program for training technicians for Poland, has provided Fellowships for 17 men in the following fields:- Electrical Traction Transportation Telecommunication Railwiay Transport (Rolling stock Constr.) and Repair Production Organization and Labor Management - 115 - Blast Furnaces and Metallurgy Rolling Mills Specializing in Thin Sheets Machine Tool Production Electrical Engineering Chemical Engineering Motor Vehicle Transport Organization and Repair Coal Tar Processing General Construction Urban Planning Construction of Steam and Oil Turbines Petroleum Production and Refining Coal and Mineral Mining These men were sent to the United States for technical training and visited plants and travelled extensively. They will make a most valuable contribution, as.trained specialists, to the rebuilding and development of Poland. Finally, the UNRRA Mission to Poland included an Industrial Rehabhilitation Division. Imported personnel consisted of a consultant on highway transport and specialists on machine repair, railroads, general construction equipment and telecommunications. Technical assistants were recruited locally. The division assisted the Government in the preparation of its requirements, in day-to-day adjustments of the program, was of material aid in assuring a smooth flow of the equipment and supplies from the ports to the final users, and ensured that the best use was made of the equipment once it was installed. - 116 - APPENDIX I" IMPORTANT PLANTS AND INDUaTRIAL EQUIPMENT TO BE CONSTRUCTED ORBREBUILT 1946 - 1949 Electric Power Plants: 1. Power Plant in Miechowice - 150 MW 2. in Gorzow - 30 MW 3. Installation of 40 turbo-generator sets, power 300 MW 4. Construction of high tension lines Silesia, Lodz, Warsaw, 320 km. long, load 220,000 volts. Coal Industry: Mines: "Ziemowitt", "Weso%all and "Gigant" Liquid Fuel Industry: Synthetic gasoline plant in Dwory Iron and Steel Industry: 1. Coking plant at the "Kosciuszko" iron works with a yearly output of 300 thousand tons. 2. Two blast furnaces, daily capacity of 600 tons each. 3. Slabbing mills at the "Bobrek" iron vworks. 4. Rolling mills at the "Kosciuszko" iron works. 5. Sheet metal rolling mill (Sedzimir), continuous or reversible. 6. Seamless pipe drawing mill at Sosnowiec iron works. 7. Wire mill at Czestochovwa iron works. 8. Rebuilding of "Andrzej", "Zebrze"',"Fliwice" and "Stolczyn" iron works. Engineering Industry: 1. Plant for agricultural implements (Dobre Miasto-Mazury) 2. Non-ferrous metals plant (%abedy) 3. Chemical apparatus plant (Nysa) 4. Automobile factory in Szczecin, - 117 - Electrotechnical Industry: 1. Electric apparatus plant in Xodz. 2. Automotive electrotechnical parts plant in Gliwice. 3. Electrical insulation materials plant in Gliwice. 4. Cable and wiring plant on the sea coast. 5. Electric railway signal equipment plant. 6. Radiotechnical equipment plant. 7. Accumulator and electric car plant in Poznan. Chemical Industry: l. Expansion of nitrogenous fertilizers plants in Chorzow and Moscice. 2. Thermophosphate plant in Bonarka near Krakow. 0 - 118 - APPENDIX II INDUSTRIAL MACHINERY AND EQUIPMENT REQUIRED FROM OVERSEAS SOURCES Textile Industry 1. Machinery for the weaving of synthetic fibre (Steelon). Annual production capacity 100 to 150 metric tons. 2. Machinery for the production of hosiery needles. Annual production 30 million pieces. 3. Machinery for the production of needles for combing equipment. Annual production 120 million pieces. 4. Fibre, yarn and fabric measuring instruments. (dynamometers, twistmeters, etc.) Timber Industry 1. Three complete installations for the production of wood composition from wood refuse. Capacity 10 to 18 thousand cubic meters per annum. 2. Two complete plants for the manufacture of plywood. (Annual production capacity 200 million current zlotys) * 3. Five complete drying installations for wood products (large capacity) Paper Industry 1. Complete installation of plant for the manufacture of bleached cellulose from straw. Annual capacity 10 thousand metric tons. 2. Complete factory for the manufacture of sulphate and viscose cellulose. Annual production 20 thousand metric tons. Building Industry 1. Two limestone breakers. including transporters to cement plant. Capacity 120 tons per hour. - 11'5 2. Two cement mills Capacity 600 tons per 24 hours each. 3. Pneumatic drills, 90 mm diameter 15 meters long. 4. 13 hand drills "Ingersol Rand" or "Flotmannt", together with drills. 5. Coal dust pulverizing equipment together with driers. Capacity ten tons per hour. 6. Four machines for packing of cement "Bates system". Capacity 50 tons per hour. 7. Four dust precipitators to supplement above "Bates" equipment. 8. Two complete sets of penumatic equipment for transport of cement. "Flux" system. 9. Two cement rotary furnaces, 400 tons per 24 hours each. 10. Com-plete installations of new cement manufacturing plant. Capacity 350 thousand tons per annum. Leather Industry 1. Complete factory for mass production of footwear. Plant capacity ten million pairs per year. * 2. Complete installation for the production of leather composition from leather refuse. Chemical Industry 1. Rotary gas compressor, capacity 20 thousand cubic meters of coke gas per hour, with electric drive. Primary pressure three atmospheres, final pressure eight atmospheres. 2. A cylinder compressor, capacity 40 thousand cubic meters of gas per hour. Compression from 7 to 16 atmospheres together with speed governor. 3. Two vacuum pumPs for distillation of pitch. Canacity 20 cubic meters per minute. - 120 - 4. A complete apparatus for synthethizing ammonia obtained from coke gas, including catalytic ovens. Capacity 150 thousand cubic meters per day. 5. Complete installation for the production of industrial and commercial plastics. (For example, bearings for machinery, non-shatterable glass) Smelting Industry 1. Slabbing machine, capacity 400 thousand tons per year. 2. A continuous rolling plant for bars and sheet-billets. Capacity 400 thousand tons per annum. 3. A hot drawing plant for thin sheets (up to 1.2 mm) Capacity 200 thousand tons per annum. 4. Cold rolling plant for thin sheets (up to 0.2 mm) Capacity 150 thousand tons per annum. 5. Rolling plant for seamless tubes, including heaters, cutting machinery and electric motors for alternating current (50 cycles, six thousand, three thousand, and 380/220 volts) for the manufacture of pipes having a diameter from 38 to 102 mm, bar centering machine, and finishing machine. Capacity 1,500 to 2,500 pieces per eight hours. 6. Auxiliary machinery for the finishing of heavy sheets. a) Two straighteners b) Six cutters Capacity 40 thousand tons per annum. 7. Wire drawing equipment. Capacity 80 thousand tons per annum. 8. Hoop iron rolling plant (40 to 300 mm in width) Capacity 200 tons per eight hours. - 121 - 9. A complete factory for the manufacture of mine cables. Capacity approximately one hundred mine cables, one thousand meters long, per month. Engineering Industry 1. Complete factory for the manufacture of ball and roller bearings. Capacity 700 thousand bearings for rolling stock and machinery per annum. 2. Engine lathes, height of centers 15000 mm Distance between centers 10,000 mm 2 pieces Engine lathes, height of centers 600 mm Distance between centers 8,000 mm 10 pieces Boring and milling machines 02,000 mm 5 pieces Boring and milling machines $3,000 mm 2 pieces Turret lathes 150 mm 5 pieces Turret lathes 250 mm 5 pieces Automatic turret lathes 056 to 64 mm 12 pieces Multi-tool lathes 0360 mm 10 pieces rvulti-tool lathes 0440 mm 7 pieces 0 4-Spindle automatic machines, Chuck 0300 mm 4 pieces 6-Spindle automatic machines, Chuck 0 50 mm 5 pieces Various special lathes for ingots of 2,000-3,000 mm 5 pieces Various special lathes for crankshafts 250 x 2,000 mm 15 pieces Various special lathes for crankshafts 500 x 4,000 mm 4 pieces Various special lathes for crankshafts 400 x 3,000 mm 4 pieces Special lathe for crankshafts 750 x 8,000 mm 1 piece Special lathe for crankshafts 1,000 x 8,000 mm, 1 piece - 122 - Various special lathes for rollers 0200-300x2,000mm 5 pieces Various special lathes for rollers $500x2,000-5,000mm 2 pieces Various special lathes for rollers 0900x4 5 ooo-6,ooomm 5 pieces Various special lathes for rollers 0l200x6,000-8,9oomm 2pieces Universal backing-off lathes, center height 225 mm- 1i pieces Universal heavy duty milling machines, Length of table 1500-1900 mm 10 pieces Vertical milling machines, heavy design 1500-1900 mm 8 pieces Milling frame-type machines, multiple sliding tool rests 1250-400b mm 8 pieces Milling frame-type machines, multiple sliding tool rests 1500x40000 mm 2 pieces Milling machines for camshafts 5 pieces Milling profile machines 3 pieces Milling and boring machines 0200mm x 5000 mm 2 pieces Milling and boring machines 0250mm x 6000 mm 1 piece 4-Spindle drilling machines $50mm 5 pieces Radial drilling machine 0100x1500-3000 mm 3 pieces Radial drilling machine 0125x2000-3500 mm 2 pieces S-oecial drilling and planing machines (for rails) 2 pieces Special drilling and planing machines (for automotive cylinder blocks) 10 pieces Cylinder boring machines 0500 mm 2 pieces Cylinder boring machines $1000 mm 3 pieces Frame planers l000x5000 mm 10 pieces 2000xa t000 mm 2 pieces 3000xlO,000 mm 3 pieces Sheet edge planers 250xlO,OOO 2 pieces Railwnzay crossing planers 1250x400x3000 - 4500 mm 2 pieces 1600x400x3000 - 4500 mm 3 pieces - 123 - Universal round grinding machines $300 mm/4o00xl000-3500 mm 3 pieces Universal round grinding machines 0400 mm/500x1000-4500 mm 2 pieces Centerless heavy duty universal grinders 2 pieces Surface grinders with long table 600 x 4500 mm 2 pieces Surface grinders with long table 8o0 x 4500 mm 2 pieces Vertical grinders diameter of 1200 mm length 2000-3500 mm 3 pieces Surface grinders with round table $1000 mm 3 pieces Special grinders for rollers 0600 x 2000 mm 5 pieces $800 x 3000 mm 2 pieces Spur and cone gear lathes 01000 mm 3 pieces 01800 mm 2 pieces Gear shapers $ 400 mm 3 pieces 0 800 mm 1 piece $1100 mm 1 piece Periphery milling machines for spur and cone gears, also for worm gears 01500 mn 3 pieces 02000 mm 3 pieces * 03000 mm 4 pieces Pipe cutters , 500 mm 6 pieces 0 750 mm 3 pieces $1000 mm 2 pieces Metal saw 0 750 rm 5 pieces Electrical Industry Two complete electric bulb plants Capacity six million pieces each per annum A complete factory for manufacture of measuring instruments (ammeters, volt meters, etc.) - 124 - Transformer oil 500 tons Mica 10 t6ns Diamond wire drawing machines 1,500 pieces Complete factories for Approximate value (Thousand dollars) Automotive electric systems 412 Heavy electrical machinery 750 Insulation materials 425 Lowr voltage apparatus 491 Electric furnaces 280 Copper rolling and cables 2,000 Storage batteries 426 Transformers 655 Telephone switchboards 630 Radio tubes 1,050 Radio sets 290 Radio parts 430 Total 7,839 Electric Power Supply Two Turbogenerators, 50 megawatts P = 72 atmospheres temp 5000C Six Boilers 105/130 tons of steam per hour. Two complete installations for power plant, one 100 megawatts, one 40 megawatts. One Turbogenerator 40 megawatts P 7.2 atmospheres, tem = 5000C Two Hydro-electric generators 35,000 HP each. - 12.5 - APPENDIX III COAL MINING MACHIMERY AND EQUIPMENT REQUIRED FROM OVERSEAS SOURCES Section X Mechanical and Electrical Turbocompressors 7 kg/sq.cm. Boilers Turbogenerators Transformers Electric Motors Circuit Breakers Various Electrical Equipment Special Pumps Underground transport Winding Machines Motor Vehicles Machine Tools Steam Engines Gdansk-Gdynia Steel Conveyor Section 11 Underground Machinery Coal Cutters Heading Machines Drills Pumps Conveyor Belting Section 111 Coal Cleaning Plants Washeries Dedusters Dewatering Plants Flotation Plants -126_ Section IV Hydraulic Sand Stowing Excavators Electric locomotives Rectifiers Transformers Trolley Wire Feeding Cable Section V Miscellaneous Materials Section VI Coking Plants Replacement parts and new equipment 9F Section VII Coal Mining Research Center Supplementary Requirements: Metal saws with hydraulic feed, motor driven and cooling device maximum diameter 400 mm, table 1500 x 3000 mm, saw diameter 1100 mm 10 pieces Sheet straighteners, sheets 20x2500 mm 2 Sheet iron bender, sheets 25 x 3000 mm 1 Wheel lathe for normal. gauge wheel-sets 0800 x 2500 mm 1 wheel-sets 01000 x 2500 mm 1