Industrialization of the Soviet Far East

Institute of Pacific Relations

Industrialization of the Soviet Far EastAuthor(s): Kathleen BarnesSource: Far Eastern Survey, Vol. 4, No. 7 (Apr. 10, 1935), pp. 49-53Published by: Institute of Pacific RelationsStable URL: http://www.jstor.org/stable/3021974 .

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FAR EASTERN SURVEY

Fortnightly Research Service

AMERICAN COUNCIL ? INSTITUTE OF PACIFIC RELATIONS

129 East 52nd Street ? New York City

Russell G. Shiman, Editor Telephone: PLaza 3-4700 Cable: Inpard

VOL. IV ? 7 APRIL 10, 1935 Aiinual Subscription $2.50

Gontents

INDUSTRIALIZATION OF THE SOVIET FAR EAST

Automobile Sales in Japan Increasing Rapidly China's Silk Industry in Precarious State Trade Gains for Japan Seen in Sale of C. E. R.

Comment on "The Crisis in the Chinese Cotton Industry"

INDUSTRIALIZATION OF THE SOVIET FAR EAST

by Kathleen Barnes

The great wave of industrialization that has been

sweeping over the U. S. S. R. has reached the last frontier. The Far Eastern Region, the outpost of the Union on the Pacific Ocean, is being industrially de?

veloped. This area had little significance for the Tsar- ist government except from a military point of view. Its colonization and economic development under the old regime was carried on almost exclusively from this

angle. The Soviets are just as keenly aware of the

strategic importance of the region, and they have un-

doubtedly carried on extensive military developments for its defense, but they are also alive to its economic

potentialities. During the first Five-Year-Plan definite

progress was made towards the realization of these

potentialities, and the second Piatiletka, 1933-1937, is carrying forward the industrialization at an in? creased tempo. Reports at Party and Soviet Con-

gresses, items in the Soviet press, accounts of travel-

lers, draw a picture of intense activity. This activity extends to every branch of national

economy. The fish, lumber, gold and fur resources of the region had been exploited before

Activity the Soviets took charge. These activi- in All Lines ties are being enlarged and put on an

industrial basis at the same time as new sources of economic wealth are being discovered and developed. Heavy industry is being built up by the mining of the basic fuels and ores, the creation of a metallurgical plant and the construction of a series of large machine shops. The means of transport for raw and finished products are being extended both on water and on land. A light industry to provide con?

sumption goods for the population of the region is

being developed, and great stress is being laid upon the building of an agricultural base capable of making this area self-sufficient.

The Far Eastern Region is a territory of great size and of great wealth. It is diverse in its climate, its

geography, its vegetation and its inhabitants. Bounded on the east by the Pacific Ocean, it stretches from the Arctic Ocean to the boundaries of Manchuria and Korea. Its area of 1,184,740 square miles includes the

peninsula of Kamchatka and the portion of Sakhalin Island which lies north of the 50 degree parallel of latitude. The climate is one of extremes, being very cold in winter and hot in summer. The vegetation ranges from sub-tropical to Arctic forms. The popula? tion is composed not only of many different indigenous peoples, but also of Ukrainians, Koreans, Chinese, Jews, Russians and others; but, despite the large num? ber of different nationalities represented, the total pop? ulation is small?1,860,100 on January 1, 1933. The

greater part of the population is situated in the south? ern part of the Region, while to the north lie great stretches of almost uninhabited land. The adminis- trative center is Khabarovsk, a dty of 102,000 inhabi?

tants, situated close to the Manchurian border on the Amur River, and the largest dty and prindpal port is Vladivostok with a population of 190,000.

The natural wealth of the region includes timber, furs, fish, gold, coal, oil, iron, silver, lead, zinc, tin,

copper, tungsten, but the size and

Surveys quality of these reserves are in many of Natural cases extremely difficult to estimate as Resources new discoveries are constantly being

made. In 1934, for example, 156 ex-

? 49 ?



ploration groups of the Chief Geolo-Hydro-Geodesic Administration were at work in the Far Eastern Region. The industrial exploitation of these natural resources is important from the point of view of their export value. Moreover, it corresponds with the recent stress that the Soviets have been placing on the general development of local industry. The U. S. S. R. is being built up as a country, each major section of which shall have industries based on its own raw products with supporting agricultural centers. The old division into industrial and agricultural districts has broken down. Each region is being industrialized.

Before the War, the Far Eastern Region was depend- ent on what was imported from abroad or on goods transported from European Russia. Geographic location made importation particularly easy as did the fact that foreign goods until 1910 could come in duty free. The presence of the intervention armies cut off the

region from the rest of the Union until 1922, so that its development as compared with other regions has been somewhat retarded. Even in 1928, six years after the Soviets gained control, very little had been done to

change the economic character of this area. The first Five-Year-Plan began to build up new

branches of industry besides further developing pro? duction of fish and timber, which constituted the two most important branches of industry during those

years. It has been estimated that during the period from the end of 1928 to the close of 1932, more funds were invested in the Far Eastern Region by the Soviets than the Tsarist government invested there in its whole period of existence. The second Five-Year-Plan calls for an investment in this area of 4,072,000,000 rubles, or 4.12% of the total capital investment in national economy for the whole Union. Of this, 1,032,000,000 rubles, or 25.35%, is being invested in

heavy industry, and 1,315,000,000, or 32.3%, in rail? way construction.

Supply of electrical power is one of the keystones of any modern industrial system and to this point con-

siderable attention is being directed in Power the Far Eastern Region, where the Station many rivers provide possibility for

Projects great hydro-electrical development. A series of local stations is being built.

The first collective farm power station was opened in Sakhalin in the fall of last year. Work was scheduled to begin last fall on a 1,500 kilowatt hydro-electric power station on the upper Bureya River. Soon a 5,000 kilowatt electric station will start work in the new city of Komsomolsk. The two main projects, how? ever, are the electric power station at Khabarovsk and the one in Vladivostok. Both of these are to be completed in the present Five-Year-Plan, and each will have a capacity of 24,000 kilowatts. The total produc? tion of electric power in the region is scheduled to

increase sevenfold by the end of the second Piatiletka. Fuel supplies are present in great quantities in this

region. Oil, so far, has been mainly furnished by the island of Sakhalin. It also exists, however, in Kam- chatka. On Sakhalin the oil fields, which lie on the eastern side of the island, are worked partly by a Japa? nese concession and partly by the Soviet trust, Sak- halinneft. The output of this trust in 1928 was only 17,625 tons, but in 1933 it had increased to 250,000 tons. The main oil fields that have been worked to date are Okha, Ekhabi, Katangli and Nutovo. Ex-

ploratory work, however, is being carried on all the time and already several new fields have been discovered on which wells have been driven. Increase in the oil output is very necessary in order to meet the grow- ing requirements of industry and transport in the

region. A certain amount of refining of the raw product is

being done on the island itself, but the major project in this connection is the big refinery

Increased at Khabarovsk upon which construc- Oil Output tion was begun in 1932. The plant

will, of course, work on the basis of the raw product supplied by Sakhalin and it aims to

provide both the Far Eastern Region and Eastern Siberia with bright stocks. The products of the plant will replace what was heretofore shipped to this region from Baku. Already in July of last year, the first

quantity of crude oil, 3,500 tons, was shipped to the

refinery from Sakhalin. These plans for local utiliza- tion of Sakhalin oil are significant in view of the re? cent newspaper report that Japan wants to purchase the Soviet half of Sakhalin Island.

In 1914 coal was being imported into the region through Vladivostok, the output of the Far Eastern mines being only 345,000 tons. In 1922-23, when the Soviets came into control of the region, the output was 690,000 tons, which increased to 1,054,000 tons

by the beginning of the first Five-Year-Plan. In

1934, the coal output of the Soviet Far East was

2,995,000 tons, as contrasted with 92,000,000 for the whole Union. Coal deposits of various quality are found in many places throughout the region, but the

greatest efforts have heretofore been expended on the

exploration of the mines near Vladivostok in the Suchanskii district. Mines are also in operation in

Kamchatka, in Sakhalin, and in various other places on the mainland.

Any estimate of the coal reserves is at best hypo- thetical, since geological exploratory work is con-

stantly resulting in new discoveries. It is estimated

that, as a result of these investigations, the known reserves have increased more than sixty times in the last five years. This enormous increase can be attrib- uted largely to the Bureya coal fields, for, apart from the deposits located in this field, the estimates of in-

50-



Production of the Main Industries of the Far Eastern Region, Second Five-Year-Plan Project

% of Total Production

Name Unit of Measurement Total Electric Power. million kilowatt hours Coal . thousand tons Oil and Gas. thousand tons Iron Ore. thousand tons Pig Iron. thousand tons Metal Working. million rubles Brick . million units Cement. thousand tons Lumber Iiauled. million cubic meters Firewood Hauled. million cubic meters Products of Saw Mills. thousand cubic meters Plywood. thousand cubic meters Meat. thousand tons Fish (caught). thousand tons Fish (canned). thousand tons Sugar . thousand tons Vegetable Oil. thousand tons

dustrial coal reserves of the region reach only 360 million tons. The estimate of the Bureya reserves goes as high as 200 billion tons.

The Bureya coal has been known to exist for over a hundred years, but it was only in the last year that

definite knowledge was obtained as

High-Grade to the extent of these deposits. In Coal February 1934, it was reported from

Deposits Vladivostok that reserves of coal estimated at the high figure quoted above

had been located in the district of the headwaters of the Bureya, Tyrma and Upper Selemdzha Rivers. Most of the coal so far discovered is of a high-grade coking variety, of particular value for metallurgy. The

deposits extend over an area of 3,860 square miles

running about 108 miles from the present railroad.

Exploratory work is being continued, but already the reserves proved are equal to half those in the Donetz Basin.

The field will have three functions: to supply the coal to the new Baikal-Amur railway; to provide the basic coal supply for Far Eastern industry in general; and to supply the fuel for the metallurgical base projected in this region. The railroad alone will need one million tons of coal a year, and the industrial con?

sumption of coal of the region is expected to reach five million tons by 1937. Consequently the development of this field is recognized as being of prime importance. Attention is also being paid to the further develop? ment of the other smaller fields and to the mechanization of the whole industry. It was reported to the

Congress of Soviets this winter that 66.7% of the coal

mining in the Far East had been mechanized.

Up to 1931, no large source of iron ore was known in the Far Eastern Region. In fact, the region was

considered poor in this essential in- Search for gredient of industry. Yet the increas- IronOre ing industrialization, the growth of

ship-building and other machine con?

struction, required the development of the region's

own metallurgical plant. Hundreds of thousands of

tons of metal would be needed by the end of the second

Five-Year-Plan, which otherwise would have to be

transported from the Urals or from Kuzbas. The

question of iron ore supply was consequently very

acute, and in hopes of finding a solution a geological expedition was dispatched in 1931 to the Malyi Khingan Range, where a few small separate deposits of ore were already known to exist. The work of this

exploratory group sharply changed the old ideas about the character and significance of the ore resources of the region.

The group found a strip containing iron ore on the eastern side of the mountain range, stretching from the Amur River on the north to the Ussuri railway in the

region of the railway station Londoko, that is, about 145 miles west of Khabarovsk. From the investigations that were made in 1931, it was surmised that the reserves of ore here located were equal to half a billion tons. There was some question about the quality of the ore, which would make its smelting expen- sive, but it was figured that even at high costs the pig iron obtained would be considerably less per ton than if it were transported from Magnitogorsk or Kuznetz. Since 1931, further explorations have been made and in 1934 the reserves of iron ore in this region were estimated at two billion tons.

Particular attention is attached to these beds of ore because of their location so close to the Bureya coal

field, and in March of last year the trust Bureyastroi was organized to have charge of the development of both the coal and iron mines. A metallurgical plant is

projected which will utilize the coal and ore, and in November of last year it was reported that the designs for the plant had been completed. When in operation the output of the plant will be 450,000 tons of pig iron, 500,000 tons of steel and 400,000 tons of rolled metal annually. Surveying work has already been

begun on the construction site.

? 51



In the field of non-ferrous metallurgy, the Sikhote- Almski "combine" at Tetiukha has been reconstructed. Tetiukha is situated 259 miles from Vladivostok. This

plant had been built by foreign concessionaires and had come into Soviet hands in run-down condition. It

produces lead and silver, and its capacity is 1,500 tons of ore a day. At the present moment 10,000 workers are employed. Further development in the region of non-ferrous metallurgy is assured by the discovered reserves of zinc and lead, 162,000 and 130,000 tons

respectively. Of great value is the gold that exists in this area.

The gold has been worked for a long time and is per? haps the oldest industry of the region. Extensive

development is being carried on in the Okhotsko- Evenkiiskii district, and in the Amur territory on the rivers Selemdzha, Zeya, Bureya and others.

Among the industrial enterprises that will make use of the metallurgical products the most important are the ship-building wharf which has been built at Kom- somolsk on the Amur, the ship-building plant at Vladivostok which is being reconstructed, an automobile assembling plant which is planned to be begun in 1935 at Khaborovsk and the new auto-repair shop in the same city, the first section of which opened last year.

The timber reserves and their exploitation play a

large part in the development of this region. The wooded area of this portion of Soviet

Tremendous territory is equal to 10% of the whole Timber forest region of the Union. There is a

Reserves great quantity of larch, which has high industrial value, and there are other

valuable varieties of trees, such as cedar, ash, oak and

hard birch. Formerly little was done except felling and drawing the lumber out of the forests, but under the Soviet regime a series of saw-mills has been devel?

oped where the raw product is prepared for industrial use. Besides more saw-mills, two ply-wood factories and two furniture factories form part of the plans of the second Piatiletka. Mechanization of the industry is stressed. Another enterprise closely connected with

the timber industry is the cellulose-paper combine which is planned. Construction on this is scheduled to begin in 1936.

Besides timber, provision is being made for the

supply of other building materials. A cement factory has been built at Spassk. This has a capacity of

2,200,000 barrels. A lime factory (at Birobidzhan) will go into operation during the second Five-Year-

Plan, as will a series of brick-kilns, and several glass factories. Production of new building materials such

as tufa is being planned. In light industry, at the end of the first Five-Year-

Plan, there were three main branches, clothing, shoes

and printing, the extent of the production of which

equalled 11,000,000 rubles in 1932. These are to be further developed. A new garment factory was begun in Birobidzhan in 1933. Three more are planned for the region, as well as a huge shoe factory, which will have a yearly output of three million pairs of shoes.

The fish supply of the Far Eastern Region repre- sents more than 30% of the whole fish reserves of the

Soviet Union. The many rivers and Mechaniza- the long sea-coast are both sources of tionof this supply. Yet when the Soviets

Fishing came into power, fishing was prac- tically in the handicraft stage. Since

then, fishing itself has become industrialized by use of mechanization, trawlers, etc, and canning plants have been widely developed to prepare the product for

export and for home consumption. Plans for this in?

dustry include its complete mechanization and the

building of more canning plants. Closely connected with it is the development of whaling and walrus

hunting in ships. The latter was organized for the first time in 1934.

In the food industry besides the development of

fishing and the attendant canning factories, several

refrigeration plants are being constructed for the pre- servation of food produce. Sugar factories are planned to utilize the sugar beets which are grown in this area.

Soya bean is another crop which the region can grow, and a factory for extracting the oil from the beans is to be located at Nikolsk-Ussuriisk. Flour mills, maca- roni and biscuit factories are also planned. A mechanized bakery is being built at Khabarovsk, and the manufacture of salt in the region is to be developed, most of the salt having been heretofore shipped from the Black Sea.

The aim of the second Five-Year-Plan is to make the region self-sufficient agriculturally. Many steps have already been taken in this activity by means of collectivization and mechanization. It was reported in December of last year that 90.6% of the sown area is already collectivized and that the sown area had increased 20.2% over the preceding year. Significant increase has taken place in the area given over to technical crops. In 1934 sixty machine tractor stations were operating.

Transport is an extremely important question in the

development of the region. The present railroad, the Ussurii branch of the Trans-Siberian,

Expansion is being double-tracked and work has

of Railways begun on the Baikal-Amur Trunk-line. This line, which will link the Baikal

and Amur districts, will run for two thirds of its

length, 1,000 miles, within the territory of the Far Eastern Region. While no announcement has been made as to the exact route, it is known that it will run

through the Amur district to the coast, providing an

outlet to the sea and greatly aiding the Bureya-

? 52 ?



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Khingan developments. It will not be completed until the third Five-Year-Plan. Besides railroads, a series of highways is to be constructed for motor transport. One from Komsomolsk to Khabarovsk has already been completed.

In water transport, a considerable portion of the Amur river is to be made navigable for sea-going vessels. A river port is to be constructed at Khaba?

rovsk, improvements are to be made in the port of

Vladivostok, a new port is to be built in Kamchatka and several small ones in Sakhalin.

A crucial factor in all these plans is labor power. In 1932 the number of people working for hire had

grown from 182,200 in 1928 to 468,500. More recent

definite information is not obtainable. Toward the end of 1933, a decree was passed granting exemptions and special privileges to the population of the region, and it has been reported that the decree has increased

agricultural efficiency. Whether it has also proved an incentive to settlement in the region is not known. The old days of the natural flow of peasant population from European Russia to Siberia are gone, ended by collectivization of agriculture and the industrial de?

mand for workers. Since the political significance of

the area necessitates considerable secrecy, it is not

possible to discover to what extent the Soviet Govern?

ment has been able to replace natural population move-

ment by other kinds. The development of a strong industry in the Soviet

Far East has an enormous economic importance. It

also has military significance as pro- War or viding a near base of supplies for any Peace? military activities that might take

place in that region. But what can

supply an army can also be destroyed by an army. The Soviets have often declared that the Far Eastern

Region may be attacked and yet they build there a

new railway and propose constructing a large metal-

lurgical plant, to mention only two of the many indus?

trial developments. Does this signify that they really think attack extremely unlikely, or that they are

supremely confident in their ability to defend what

Stalin has termed their "market garden"?

PRINCIPAL SOURCES: The Districts of the Far Eastern Region (in Russian), Khabarovsk, 1931; Project for the Second Five-Y ear-Plan for the Development of the National Economy of the U. S. S. R. 1933-37 (in Russian), Moscow, 1934; N. Baranskii, B. Kaminskii, Socialist Reconstriiction of the Territories, Regions and Republics of the U. S. S. R. (in Russian), Moscow, 1932; A. Khavin, Socialist Industrialisation of the National Republics and Territories (in Russian), Moscow, 1933; Stenographic Report of the 17th Congress of the All- Union Communist Party (in Russian), Moscow, 1934; Si- berian Soviet Encyclopcdia (in Russian), Novosibirsk, 1929; The Far Eastern Region in Figures, Statistical Handbook for 1932 (in Russian), Khabarovsk, 1932; Industrialisation of the Soviet East (Russian periodical), Moscow, 1932; Kathleen Barnes, "Eastward Migration within the Soviet Union," Pacific Affairs, December, 1934; The Revolutionary East (Russian periodical), Moscow, 1934; Izvestxa (Rus? sian newspaper); Russian Economic Notes, Department of Commerce, Washington; Economic Review of the Soviet Union, Amtorg, New York; Economic Suryey, U. S. S. R. Chamber of Commerce, Moscow; Bulletin of Economic Information, U. S. S. R. Chamber of Commerce, Moscow.

SIGN1FICANT DEVELOPMENTS

AUTOMOBILE SALES IN JAPAN INCREASING RAPIDLY

Considerable publicity has attended the advent of

the new Datsun car, a Japanese automobile of midget

type said to be capable of travelling 50 miles on a

gallon of gas. Predictions are freely made that be?

cause of its cheapness the new car will not only cap- ture the domestic market in Japan, hitherto supplied

largely by American manufacturers, but will also be

exported in large quantities. But there is as yet little

reliable factual information upon which to base an

estimate of the validity of these predictions. The growth of Japanese imports of motor cars and

parts from ?13,000,000 in 1923 to ?33,000,000 in 1929

would indicate a steadily expanding demand. The de?

pression caused a gradual drop to ?13,000,000 in 1933, but in 1934 a sharp upturn occurred, and imports for

the first six months were nearly as great as for the

whole of the preceding year. Yet there is only one

car for every 625 persons in Japan, as compared with

about one to four persons in the United States. Exten-

sive government projects for highway improvement are

likely to stimulate the use of automobiles, especially trucks and buses. As regards passenger cars, the factor

of popular purchasmg power would appear to be of

decisive importance. Nearly all of the ears now in use in Japan are

imported, about 98% of the imports coming from the

United States. This is despite a tariff of 50% ad

valorem on automobiles, 42% on parts and 35% on

engines (reduced under the conventional tariff, which

the United States enjoys, to 35% on all three cate-

gories). Most of the import consists of parts, which

are assembled in Japan. Ford and General Motors

have assembly plants, which together turned out about

15,500 ears in 1933. The number for 1934 is not yet

available, but registrations of American ears in Tokyo increased 144% over 1933.

Although the manufacture of automobiles in Japan dates back to the World War, the domestic industry has remained comparatively unimportant, consisting

largely of the manufacture of trucks for the army under subsidy from the War Department. Only re?

cently has the Government begun to take an interest

in encouraging the manufacture of other types of ears.

A commission set up in 1931 recommended a policy

? 53 ?



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Industrialization of the Soviet Far East