Note from S. Kruglov to Malenkov with an Accompanying Communication from the Executives of the MIA USSR P. Fedetov and I. Fadeikin

No. 166/k 9 July 1953
Top secret

I present you with a communication from the head of the First Chief Directorate of the MIA USSR, Com. Fedotov, and the Representative of the MIA USSR in Germany, Com. Fadeikin, about some facts characterizing the situation in the Politburo of the CC SED.

Minister of Internal Affairs of the USSR S. Kruglov


MIA USSR

In the last few days, the GDR Minister of Trade and Supply, Com. Wach, [and] the members of the Politburo of the SED CC, Coms. Oel=DFner and Matern71 in conversations with the executives of the apparatus of the MIA of the USSR in Germany, informed them on their own initiative of several noteworthy facts about the situation in the Politburo of the SED CC after the June events in the GDR.
1. In a 30 June conversation with the head of the apparatus division, representative com. Popov, com. Wach shared his impressions about the meeting of the Politburo of the SED CC of 9 June 1953, at which the report of the deputy prime-minister Rau72 on the redistribution of capital investment was presented.
Rau proposed to save 1,300 million marks of capital investment in heavy industry and to direct them toward the financing of light and other branches of industry which supply the needs of the populace, but he stated at the same time that he personally disagreed with cutting expenditures on capital investment in heavy industry.
Speaking at the meeting of the Politburo, Ulbricht said:
"I do not agree with the planned sum of 1,300 million marks. We cannot free up such resources. Rau's plan disorganizes the national economy, and our economy is already disorganized as it is. I have been to a series of enterprises and have established that the workers are worried not so much by rises in the output norms as by the disorganization of the economy, [and] the lack of a normal food supply. Industrial enterprises cannot work normally if they are supplied with raw materials and materials to [only] 40% of their needs. Rau's project must be re-examined, in particular on the issues of external trade."
In his address, the chairman of the State Planing Commission, Leuschner73 also noted that Rau's plan was unrealistic. This plan, he pointed out, relied on the resources that were supposed to be freed up as a result of limiting expenditures on heavy industry, but all of these resources had already been used to meet other needs and there were practically no funds available. Leuschner also pointed out that Rau, in introducing his proposals, did not agree on them with the members of the commission created to locate resources for financing the measures projected in the government decree of 25 June.
At the meeting, the Minister of Ore-Mining Industry Selbmann74 stated:
"I believe that we must not curtail expenditures on heavy industry. It is incomprehensible to me why it is necessary to close down the construction of enterprises temporarily if 50% of the work is not yet completed. If resources are refused to me, I will have to reduce the output of steel, and that will be reflected in light industry: the output of machines will be reduced, mines will stop working, workers will have to be laid off, not to mention that stopping work in some mines will lead to their flooding with water."
The Minister for Machine Construction, Ziller75, sharply objected to the withdrawal of 100 million marks previously designated for capital investment in energy production. "I ask," he said, "who is supposed to, and at the cost of what resources, carry out the Republic's program of energy-supply? You yourselves have said a lot about the necessity of carrying out this program. Such a plan as that proposed by Rau cannot be carried out. If it is taken as a basis [for action], then I cannot deliver the necessary machines for light industry and am not in a condition to fulfill the plan on the supply of electrical equipment."
Oel=DFner, Elli Schmidt,76 Ackermann,77 Strassenberger,78 and others also spoke in opposition to Rau's plan.
The Minister of State Security Zaisser noted on the subject: "From listening to the statements by our comrades, one gets the impression that capital investment in heavy industry not only must not be cut, but, quite the opposite, must be further increased. But where can the resources be taken from? Rau gave no answer on this issue."
Ulbricht spoke a second time, saying: "In my opinion, we should turn to the Soviet government with the request that they lower the reparation payments."
In support of Ulbricht, the Director of the State Administration for Material Supply, Binz, said: "I believe that we will be able to get out of this catastrophic situation and improve our position only if the Soviet Union renders us the same help that the USA is giving Western Germany through the Marshall Plan." No one reacted to this statement by Binz.
During the break the Minister for External Trade of the GDR, Gregor,79 characterized the situation at the Politburo meeting, saying: "This is not a Politburo, but a madhouse."
2. Politburo member, Com. Oel=DFner, with whom a conversation took place on the first of July of this year, believes that the Politburo committed a mistake when it announced the Politburo's and Government's New Course program in a very brief form without announcing the reasons for the party's policy change beforehand. In his opinion, it would have been better to put the New Course into operation step by step, accompanying this with broad propagandistic-explanatory work.
Com. Oel=DFner further criticized the party leadership for not heeding the signals of discontent among the populace earlier and for not understanding that this discontent could have serious consequences.
In the opinion of com. Oel=DFner, the measures which are currently being carried out by the party and the government to improve the living standard of the populace have not yet yielded the expected results. The workers, in his words, continue to take a wait-and-see position, not yet trusting the party.
In the words of com. Oel=DFner, they can take such a wait-and-see position for a month or a month and a half. If in that time the party does not eliminate the mistakes which have occurred, then the situation could worsen again.
In the opinion of com. Oel=DFner, the admission of mistakes by the leading officials of the party and government had an unhealthy effect. Speaking before workers, they try to admit to as many errors as possible and, to an extent, such expressions of atonement provoke mistrust on the part of the workers. At the same time, they themselves still have actually not recognized the full depth of the erroneous actions by leaders of the party organs in the past. In com. Oel=DFner's opinion, com. Ulbricht most of all has not understood the erroneousness of his conduct. He has not understood that as a matter of fact he lost touch with the masses and that his methods of dictatorial leadership were one of the serious reasons that errors were committed. In his practical activity, Ulbricht had not changed and continued to work as before; of note was only the fact that he had become more passive. Ulbricht was still inclined to create an atmosphere of pomp around his person.
Thus, for example, through his wife, Lotte Kuhn, who is a member of the committee organizing the celebrations for his 60th birthday, Ulbricht demanded that a celebration be held in the most majestic circumstances. At the same time, when com. Pieck, during a conversation with Ulbricht in Moscow, drew his attention to the undesirability of such excessive ceremonies, Ulbricht replied that he knew nothing about the plans being made for the celebration, and that if something was being planned, it was without his participation.
At the conclusion of the conversation, com. Oel=DFner stated his opinion that at present there was no complete unity of views in the Politburo.
Thus, he recounted that when he recently went into Grotewohl's office where Zaisser and Herrnstadt were sitting, those present were embarrassed and quickly ended their conversation. Previously, com. Oel=DFner noted, nothing of the sort had been apparent.
3. Politburo member com. Matern, with whom a conversation took place on 2 July of this year, stated his opinion that the party at present did not have a really militant leadership and, related to this, that its work was disorganized. The Politburo meetings which took place in June were-on the whole-of an elemental and unorganized character. The Politburo made almost no practical decisions. In a series of meetings less than half of the members and candidates of the politburo were present.
The executive party members, including the members of the Politburo, did not have a concrete idea of how to proceed at the 15th Plenum of the SED CC, which is planned in the near future. Up to this point, the fundamental documents had not been assigned.
The secretaries of the SED CC, after the arrival of com. Ulbricht in Moscow at the beginning of June, were not really doing any work; meetings of the secretariat were not being held. Com. Ulbricht had not explained the reason for the halting of work.
Touching on the work of the secretariat, com. Matern stated that, in his opinion, this work was incorrectly organized. The secretariat has been turned from a political organ into Ulbricht's personal office. The members of the secretariat did not take any personal responsibility for their separate spheres of work, but only prepared materials at the direction of Ulbricht and "nodded their heads in agreement with all the proposals of the secretary-general."
Com. Matern believe that the secretariat should become the basic executive organ of the party and should carry out all of its practical work. In connection with this, the secretariat should be reduced to be composed of approximately 5 persons who were also members of the Politburo and bear responsibility for precisely defined spheres of work.
Com. Matern pointed out the poor leadership on the part of the SED CC of the district, regional, and local party organizations. The chairmen of the district parties' governing boards did not receive concrete principled instructions from the SED CC. Lately they did not even have the chance to communicate with com. Ulbricht by telephone, since, on his orders, the telephone operators did not connect them with him.
For this reason, the leaders of the district organizations were obliged to deal only with members of the secretariat-Axen80 and Sch=F6n,81-who, however, could not give them concrete instructions and usually limited themselves to statements about the fact that they did not know anything and that the leaders of the organizations had to make decisions as they saw fit. At the same time, com. Matern noted, the party organizations, given existing practice, were not versed in independent work.
In the opinion of com. Matern, the party workers had lost the ability to look at life with their own eyes, to take stock of circumstances independently, [and] were afraid to take decisions at their own risk, even if this was urgently called for. During the June events, for instance, not one of the leaders of the local party organizations held a meeting, explaining this by an absence of instructions.
All of this, com. Matern observed, was the result of the defective leadership methods on the part of Ulbricht, whose motto was "No one can do anything without me."
At the upcoming plenum of the SED CC, com. Matern is determined to speak out, particularly with a criticism of these leadership methods on the part of Ulbricht.
Touching on the disorganization in party work, com. Matern cited the following example: Ulbricht, Grotewohl and Oel=DFner, who were in Moscow at the beginning of June of 1953, sent a telegram to the SED CC with the order to take all literature touching on the work of the second party conference82 out of libraries and commercial circulation. On the basis of this telegram, the Central Committee sent a directive to the local party organizations which initiated a mass confiscation of the specified literature. The matter went so far that in the central library of Leipzig all of the works of Ulbricht which referred to CC directives were removed.
In the opinion of com. Matern, the party is at present disunited, once more sectarian tendencies were emerging. Com. Matern divides all of the members of the party into three groups:
1. communists with a longstanding record of service who understand the New Course of the party and support it;
2. young party members who entered the party after 1945, many of whom do not understand the New Course of the party, consider it a step back from the construction of the foundations of socialism and for that reason do not agree with it;
3. former social-democrats, who consider that if the former social democratic party still existed, the events of 17 June would never have happened. Com. Matern noted that he knew of a whole series of cases where former social democrats demanded the party leadership to return their membership cards to the social democratic party. In the opinion of com. Matern, Buchwitz,83 one of the veterans of the Social Democratic Party, is the leader of this third group.
Com. Matern believes that so far the mood of the population has not changed decisively. One of the reasons for this, in his opinion, is the continuation of the policy of embroidering the truth by the party. The CC delegates who travel to the factories promise the workers everything they demand. Moreover, every [official] making a report considers it his duty to surpass the promises of his predecessor. As there is still no practical fulfillment of promises, the workers have again stopped believing in them.
In conclusion, com. Matern noted that correcting the errors that have been made and strengthening the party will in large part depend on what position com. Ulbricht will take at the 15th plenum of the SED CC, on whether he will admit his mistakes and find the courage for self-criticism. Ulbricht's current passive behavior, in the words of com. Matern, does not inspire optimism in this respect.

Leader of the First Chief Directorate of the MIA of the Union of SSR Fedotov
Representative of the MIA USSR in Germany Fadeikin
5 July 1953

[Source: AP RF, f. 3, op. 64, d. 925, ll. 156-165. Translated by Benjamin Aldrich-Moodie (CWIHP).]"