ARTICLES

TWENTY-NINE CANADIAN CAPITALISTS BRING BACK An unusual new view of Russia

Recently a party of leading executives toured the Soviet, each looking hard at his own industry. They were impressed and disturbed. This report tells why

McKenzie Porter August 16 1958
ARTICLES

TWENTY-NINE CANADIAN CAPITALISTS BRING BACK An unusual new view of Russia

Recently a party of leading executives toured the Soviet, each looking hard at his own industry. They were impressed and disturbed. This report tells why

McKenzie Porter August 16 1958

TWENTY-NINE CANADIAN CAPITALISTS BRING BACK An unusual new view of Russia

ARTICLES

Recently a party of leading executives toured the Soviet, each looking hard at his own industry. They were impressed and disturbed. This report tells why

McKenzie Porter

Although hundreds of Canadians have visited Russia in the years since Stalin's death, most of them have been communists, journalists, statesmen, diplomats or simple rubbernecks. Last April, however, Edgar T. Alberts, a Toronto insurance broker, organized a much less likely band of visitors to the Soviet scene. They were twenty-nine hard-headed Canadian businessmen, specialists in banking, stockbroking, merchandising. aviation, construction, engineering and mining, men of wealth and prestige, all fervent believers in capitalism. They returned with a new picture of Soviet life, and with facts and figures that contradict many popular conceptions of the Russian economy, character and attitude.

Some of the information they collected may be open to dispute, but they took careful notes on what they saw and were told. "They were not the type of men,” says Alberts, "who would allow their deep disapproval of communism to blind them to the realities of Russian achievement or to color accounts of what they saw.”

W. R. McLachlan. president of Orenda Engines Ltd., of Toronto, sums up in six words the feelings of himself and his companions about the trip. He says, “It was frustrating, fascinating and frightening.”

The group was frustrated by the contented looks of almost every Russian it sawand by the realization that the USSR is very unlikely to collapse from w'ithin or move toward Western standards of political democracy. It w;as fascinated by the pace at which Russia is drawing abreast of the West in the production of machines. aircraft, cars, appliances and many other symbols of abundance. Anil it was frightened by signs of Russia’s impending capacity to dominate the w'orkl not necessarily with ICBMs and Sputniks but through scientific superiority in peaceful enterprises—a superiority that appeared to be within Russian capabilities.

Some members of the party, including John David Eaton, president of The T. Eaton Company Ltd., predict that "within fifteen years Rus-

sia will surpass the United States economically.”

The Russians set such great importance on the Canadian visitors that Premier Khrushchev spent an hour and forty minutes in their company. Yet the Canadians were entertained only modestly. They saw no evidence of high life and they never felt that the Russians were trying to buy their good will.

Save for a free ride in a Russian aircraft from London to Moscow the Canadians paid all their own expenses. The trip cost each member an average of thirty-five hundred dollars. Since they spent only twelve days in Russia the businessmen do not profess to be authorities on Soviet life. They are merely reporting what they saw and heard.

The group watched adequately clad, amply fed workers operating up-to-date equipment in congenial conditions at modern factories, mines and construction projects. It saw bright, healthy, happy - looking children exhibiting pride and honesty. It met intelligent, relaxed and genial university students who enjoy books, opera records. ballet productions and chess. And it was guided by good-humored officials who were ready to show anything save armaments and military installations. "They showed us.” says P. C. Garratt, managing director ot de Havilland Aircraft of Canada Ltd., "more than we would have shown them."

In some details of industrial development—in steam shoveling, pile driving, dam building, power transmission, steel forging and flour milling, for example—various members of the party noted technology that is ahead of the West's. Several Canadians observed Russian automobiles, bicycles, refrigerators, television sets and toys rolling oil the assembly lines "like chewing gum.” The entire party flew in a jet-propelled passenger aircraft that was less luxurious than those of the West, but apparently just as good mechanically. They rode in trains drawn by the latest type of diesel locomotive, and though by Western standards the washrooms were primitive and accommodation w'as cramped, these trains were punctual, rapid, quiet, smooth and clean.

It still takes two and a half Russians, the party discovered, to match in one hour the production of an average Canadian worker. Russian homes, it decided, are jerry-built

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An unusual new view of Russia

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“They’re out to subject us by beating us in world trade. If we don’t watch out, they will”

and overcrowded. Russian clothing is drab, shoddy and badly cut. High heels, nylons, lipsticks, hairdos and other aids to western-style sex appeal are rare. And in the Western sense night clubs, cocktail bars, cabarets and good-time girls do not exist.

"But." says Harold McNamara, president of Toronto's McNamara Construction Company Ltd., "the Russians know they are badly dressed and poorly housed and leading a somewhat humdrum life. I hey are a bit ashamed about it and are going all out to brighten things up. 1 hey are progressive, skilful and ambitious. To think of them as a mass of plodding peasants is crazy."

C. Bruce Hill, president of E.T.F. Tools Ltd., of St. Catharines, Ontario, adds: "The Russians are proud of what they have achieved. They've pulled themselves up from the devastation of war by the boot straps. They are not afraid to say that they are trying desperately to catch up to the living standards of the United States. To achieve this ambition they are putting first things first.”

Why they fear us

Hill thinks the Russian automobileproduction policy epitomizes the nation's determination to concentrate on essentials before it goes in for luxuries. “To save costly dissipation of effort on diversity." he says, "they make only four models, comparable in size and weight to the Cadillac, Chrysler. Ford and little English car. These cars have little chrome and few accessories. But they are rugged, powerful, fast, roomy, comfortable and rattle-free.”

Hill adds: “The Russians are imbued with the idea that they are a peace-loving nation and that we are the warmongers. They have been sold this bill of goods right down the line. They are scared of the United States and determined to protect their way of life."

Like other Western observers the group was awed by Russia's meticulous, relentless and far-reaching policy of technical education and research. R. J. Adams, president of American Land and investment Corporation Ltd. of Vancouver. says: "The Russians are providing themselves with the biggest reservoir of brains the world has ever known. It scared me when I saw what they are doing." A. D. McKee, president of Pet ini Ltd., a Toronto construction company, says: "The Russians don't want war because they've too much to lose. They don't think they'll have to use the atom bomb anyway. They're out to subject us by beating us at world trade. And if we don't look out they will."

The party flew from London to Moscow on May 3 in a Russian T U 104 twin-jet. seventy-five-seat airliner, of the type seen in Vancouver last Air Force Day. It traveled at five hundred and fifty miles an hour at thirty-live thousand feet. "The upholstery was not so good as we are used to." says P. C. Garran. "Beside each seat was an oxygen mask which might have indicated some slight lack of confidence in the pressure system. Otherwise it seemed to be a fine aircraft."

On reaching Moscow the Canadians found their hotel old-fashioned, sombre, but clean and comfortable. The Russians were celebrating the three-day May

Day vacation. "There w'ere twenty-five thousand people milling about Red Square,” says C. Bruce Hill. "They took no notice of us because they are now' quite used to Westerners traveling through their country."

The party soon split up to examine various aspects of Russian life. A. C. Ashforth. president of the Toronto-Dominion Bank, studied the economy and found reasons to explain why he thinks the Russian is "content with his lot."

Most grown-up Russians work eight hours a day six days a week. Eighty percent of adult women work and are paid equally with men. Their infants go by day to crèches and are cared for by qualified personnel. Women were seen

working as technicians, bricklayers and street sweepers, as drivers of diesel locomotives. trucks, and factory power carts, and as operators of concrete mixers, cranes and mine-shaft elevators. Eighty percent of the physicians are women. They are looked upon as "repair men," as advanced nurses, and enjoy no special social prestige. They start at twentyfour hundred dollars a year, said to be the average rate of pay in Russia. Only top surgeons and medical men and women engaged in advanced laboratory research receive high salaries and rank with

the scientific, executive and political elite. This elite receives between eighteen and thirty thousand dollars a year but, says Ashforth, “it seems to set a good example by living modestly."

The highest earners and the lowest all pay the same rate of income tax—a Hat thirteen percent. Rents are set at between three and six percent of income. Food, appliances and automobiles cost about the same as in Canada. A standard television set sells for two hundred dollars, the second biggest car. comparable in power and weight to a Chrysler.

for about four thousand dollars. Clothes are more expensive than in the West. A ready-made suit costs one hundred and fifty dollars.

A Russian gets three days holiday around May I and three days around November 7, in commemoration of the revolution. Once a year, tour members were told, he goes away for a twentyeight-day paid holiday at one of the one thousand official resorts where accommodation is reserved for him, for board, lodging and a medical overhaul. If he wants to go to a place of his own choos-

ing, he can do so but at a stiff rate.

Ashforth saw no signs of dire poverty. He was interested to discover that Russians are exhorted to save by big advertisements. On savings accounts, which are deposited at the nearest pos' office, the state pays up to five percent interest. Savings are leading to the a. cumulation of property in proportion which would have upset Karl Marx. Many Russians now own their own homes, cars and furniture. In Moscow there is one car for every twenty-four people, compared with one for every three and a half people in Toronto.

Though most people prefer stateowned apartments a private single-family dwelling is permitted if the would-be owner is willing to build it with his own hands in his spare time. The builder receives only lease rights to the site and must pay an annual ground rent. When he is ready to build the house the state lends him money to buy materials for the sort of home that is. in the state's opinion, commensurate with his family's needs. Owing to the severe housing shortage the state may limit him to the minimum per-capita cubic living space, which is approximately eight feet long by eight wide by eight high. The buildei repays the loan over ten years. The first three years are interest-free. During th last seven years the borrower pays two percent per annum.

Inheritance by work

Ashforth found that a man may go into business for himself provided he does not employ anybody else. There are many one-man businesses of which shoemaking, dressmaking and hairdressing are good examples. But these tradesmen are not entirely free. The government insists on putting up either fifty or seventy-five percent of the capital invested in the business and taking a corresponding cut of the profits. Furthermore all prices are fixed so that the trader has no chance of expanding lr/ undercutting wTolly state-owned husi nesses.

Nor is it possible for the tradesman r liquidate his equity in the business. Wh n he dies he may bequeath his equity u : near relative if that relative is prepar»..I to operate it. If the relative does noi w-ish to go into the business, the property reverts in its entirety to the state.

Such personal property as homes, cars, furniture, appliances, clothing and cash may also be willed to near relatives. If there are no close kin the property is appropriated by the state. When Ashforth asked if a man could rent out an inherited house, he got a vague reply. So far as he could discover the govern ment avoids the un-Marxian phenomenon of landlords by taking over an inherited house and paying what it considers is a fair cash value. The government does not seem to fear the accumulation of large cash sums by individuals. In fact it runs regular state lotteries in which individual winners draw up to five thousand dollars.

In spite of opportunities to amas capital Russian housing conditions arc still deplorable. The Canadians saw roadside hovels built of sod. corrugated iron, old planks and logs. "Anil yet." says C. Bruce Hill, “there is an attempt to keep them trim. Those which can be painted are in cheerful colors. Most of them have a TV aerial. The occupants are evidently well disciplined in neatness and cleanliness.”

The Canadians noticed that their guides never tried to divert their attention from the hovels. A. D. McKee says. "They pointed them out to illustrate

their housing problem.” He was told that at the end of the war there were seventy-five million Russians living in makeshift shacks. In Stalingrad there wasn t a single inhabitable permanent building left. Today the shack dwellers number twenty-five million. By 1960. McKee was told, the Russians intend to have a proper roof over everybody’s head.

All the Canadians were impressed by the activity in apartment building. On the way from the airport to downtown Moscow they saw one road lined on cither side for five miles with new apartment blocks each containing four hundred dwellings.

"But.” says McKee, "1110 Russians lack skilled builders. Even in the newest buildings you see bricks falling out. crooked walls, cracks and evidence of sinking." Garratt thinks he knows why the party was never invited into Russian private homes. "Private entertaining." he says, "is not possible because ol overcrowded conditions.”

The closest insight into city housing was obtained by A. D. Margison. president of A. D. Margison and Associates, Foronto consulting engineers. He visited the Moscow home ol Commander Donald Knox, naval attache at the Canadian embassy. Knox and his wife enjoy the diplomatic privilege of living in two standard apartments knocked into one. This double space gives them a living room sixteen feet by twelve, a dining room of the same area, a kitchen and bedroom of slightly smaller dimensions. and a bathroom. Knox explained

10 Margison that under normal circumstances two families wçuld occupy this space. Each would have a kitchen and a living-bedroom and would share the bathroom.

"The Knox apartment.” says Margison. "is about three years old but it looked about thirty years old. Door hinges were crude and similar to those in our hotel, which was seventy-five years old. Wiring to outlets and lighting fixtures ran on the surface of the wall. Piping in the bathroom was exposed and primitive. Th( paint on the walls was powdery and came

011 on one’s sleeve. The elevator looked much like those installed in Canada in 1910. A woman janitor unlocked the gates to let us go up. We were not allowed to use the elevator going down."

Though Russian dwellings arc backward they don’t seem to harm the children. "We noticed," says C. Bruce Hill.

"a tremendous contrast between the facial expressions of the children and those of elderly adults. Most of the children had the alert, intelligent, cheerful expression of modern kids everywhere, while many of the older folk, who had been raised in Tsarist days, had that dull, stupid, peasant aspect." When Hill took photographs of Russian children, "they fooled around and laughed and made faces just like our kids." Hill adds: "They are neither shy nor precocious.”

Outside the hotels small boys waited for foreigners and asked them in English for coins. "At first." says Edgar T. Alberts. "some of our group thought the kids were begging and gave them a few kopeks. But they said. No no! Canadenski!' Then we realized they wanted Canadian coins. When we gave them a Canadian coin they insisted on us accepting a Russian coin, or another country’s coin.

1 hey were collecting by swapping, not by begging."

In Stalingrad about five hundred people gathered outside the Canadians' hotel to see them off. On an impulse Harold McNamara leaned out of the car window and gave a small boy a cigarette lighter For a moment the boy didn't seem to

know whether he should accept it. But after looking at the old man he was with, he took it. The old man gave the boy a box of Russian matches. The boy then pressed the matches on McNamara. "The kids are brought up to believe,” says McNamara, “that if they are given something they must give something back."

Russian children, the Canadians discovered, leave the crèches at seven and go to school. Many of the schools have distinctive uniforms. The children are taught to sit up straight and pay attention. Study of foreign languages begins immediately, primarily in Fnglish and Chinese. “There is no corporal punishment,’’ says McKee. “If a child misbehaves continuously lie is sent home for a while. This is the worst punishment he can get because he is brought up to believe that school is not a bore but an advantage.”

Every child goes to school until he is seventeen, by which time his talents have been analyzed and his future work ordained. The Canadians were dumbfounded to hear that fifty percent of Russian high-school children go on to university. (The figure is so incredible that we checked il with the USSR Embassy in Ottawa. A spokesman endorsed it without qualification.) Students who fail to pass university entrance examinations are relegated to industry. But every two years, until they are thirty-eight years old, they may sit again for the entrance exams.

University students are paid two hundred dollars a month, from which the cost of board and lodging is deducted. In conversation most students said they like reading or going to the ballet. When a CBC cameraman traveling with the group asked one student on what he spent his pay the student smiled, groped for the right English expression, and then said: "On life.”

The Canadians found universities concentrating heavily on science anti technology. Courses run in highly specialized channels with the object of turning out experts in the most obscure techniques. C. E. Soward, president of the Maple Leaf Milling Company l td., was astonished to find university students taking postgraduate courses in the mechanics of his own industry. “In Canada,” he says, "millers have to train their own personnel.”

At the Institute for Grain and Grain Products Soward saw the corrugated rollers which grind flour subjected to a meticulous experiment. Through a large microscope a slow-motion camera was taking pictures of the action of the rollers on the grain. Such pictures had enabled the institute to modify the corrugations and step up roller efficiency between two and three hundred percent.

Soward noticed that the institute had a collection of milling machinery from all over the world. “They experiment with foreign machines,” he says, “and then incorporate the best elements into their own. I don’t think they pay much attention to patent rights.”

Russia, he adds, is rapidly turning over to pneumatic flour mills, or mills in which the grain is blown along on its way to becoming flour by air pressure instead of being carried in conveyors. "In Canada,” says Soward, “we have no pneumatic mills.”

The Canadians were impressed by the existence in Russia of a State Scientific Committee, which inaugurates and coordinates all research. Under this committee is a division of thirty-four hundred technical linguists. They read every technical publication in the world, translate. condense, sort and collate the information and then pass this on to the

appropriate industries, which exploit it in any way they can.

Such methods have resulted in technical improvements which caught immediately the eye of various Canadian specialists on the trip. Harold McNamara saw an advanced steam shovel. The teeth in its bucket are agitated by a mechanical device so that they move like the fingers of a pianist playing scales but "faster than the eye can see.” This increases the speed and size of the bucket’s bite, breaks down the scoopful of earth into a friable consistency, and, through the absence of big lumps, permits a more compact loading of trucks.

McNamara also saw a new technique in pile driving: The top of the pile is attached to a machine which jerks it up and down rapidly like someone tapping a vertically held pencil on a table top. “The Russians have discovered," says McNamara, “that the major resistance to a pile is not in the earth at the bottom but in the friction of the earth around its sides. The rapid vibration of the pile throws the earth around its sides into temporary suspension, lowers the friction, and so increases the speed at which it may be sunk.”

Otto Holden, chief engineer of the Hydro-Electric Power Commission of Ontario, found the Russians building

hydro-electric dams and generators on earth foundations, an unheard-of procedure in Canada where they are built on rock. “But the Russians needed dams in places where there is no rock." he says, “and they went about solving the problem of foundations in a scientific way. 'This involved extensive experiments with the permeability and holding value of the earth, and the fact that the Russians came up with a successful formula is proof of their adaptability.”

Holden was also struck by Russian overhead transmission of electric power in large blocks at four hundred thousand volts alternating current, a higher voltage than any transmission system carries in North America. “They are transmitting over distances of more than five hundred miles." he says. “On this continent we do transmit over five hundred miles but on the way the system branches out to various loads, or connects with other systems of supply. In Russia I saw power transmitted from one generator to one load centre over a distance of five hundred and fifty miles. This represents a remarkable engineering achievement.”

Russia’s fast-rising power resources were recognized by Bruce C. Hill who visited in Moscow the Zil plant, which produces each year ninety thousand refrigerators. thirty-five hundred buses, one hundred and twenty thousand trucks, four hundred and sixty thousand bicycles, ami a hefty sideline of children’s tricycles.

He was amazed to find that the factory was beginning to heat steel for forg-

ing by induction, or by passing an electric current through it instead of heating it in a furnace. “Induction heating is more efficient than furnace heating," says Hill, “but it is so costly that it is very rarely used on this continent. The Russians told me that Zil would be heating all its steel by induction by I960. When I mentioned the enormous amount of power that would be required I was told, ‘Oh we’ve plenty of power nowadays.’ ” Hill adds: “They don’t think in terms of costs. They just do a job the best way.”

A. D. McKee noticed the same trait in construction. In many cases, instead of using steel for bridges and buildings, the Russians are using huge sections of precast reinforced concrete. "Here,” says McKee, “the labor involved in making the pre-cast concrete sections would put the price of the construction far beyond a steel job. But because the Russians want their steel for other purposes they use pre-cast concrete regardless of cost. And after all, why should they worry about costs? There’s no competitive element in their economy. The state owns everything. Every penny that’s spent by the state eventually comes back to the state.”

That the state is becoming wealthy, not only in its own but in other nations’ currencies, is manifest in recently published figures of its foreign trade.

Guides repeatedly pointed out to the group that Russia buys from Canada ten times the value of goods that Canada buys from Russia. C. Bruce Hill is pessimistic, however, about the chances of Russia achieving a balance of trade with Canada. “I saw very little,” he says, "that we’d want to buy from them.” John David Eaton, on the other hand, feels that Canada could buy with advantage Russian toys, china, linen, caviar, vodka, platinum and manganese.

The trip was not all business. The Canadians went to the Bolshoi Theatre in Moscow twice, to see the opera Eugene Onegin and the ballet Swan Lake. Otto Holden says: “They were superb productions. The theatre is magnificent. The decor is gilt and red plush and there are six galleries. Around the galleries are little chandeliers. When the huge central chandelier goes out and the curtain goes up they leave the little chandeliers alight and the whole place looks just like fairy land.”

Margison noted that the orchestra, which is about a hundred strong, seemed to be wearing white ties and tails. During an interval, however, he went up to the orchestra pit and examined the musicians closely. They were in dark business suits, some of them even brown.” Their white ties were makeshift affairs,” Margison says. “They looked as though they were cut out of old sheets or tablecloths.”

In Leningrad the Canadians visited a circus and were unanimous that it was the best they had ever seen. Holden says: "The trapeze artists take your breath away.” The great Russian clown Popoff, who gets over the language barrier by mime, was, in the words of Ashcroft, "a riot.” Even the animal acts were different. In addition to the usual run of elephants. horses and dogs the Russians brought on performing mice, foxes and hippopotamuses.

’ The Russians were not nearly so grim as the Canadians expected. One night at their hotel the Canadians had a singsong until three o'clock in the morning. The waiters worked cheerfully at bringing drinks and a middle-aged woman interpreter, deputed to look after them, joined in with enthusiasm.

At the various receptions they attended they found the Russians enjoyed a good story. They heard from the Rus-

sians one or two slightly off-color stories that were witty. And the Russians could take a joke against themselves. Speaking one sentence at a time to enable the interpreter to keep up with him, C. Bruce Hill made a speech about his impressions of a Russian collective farm: “I have a collective farm myself in Canada,” he said. “The only difference is that I do all the collecting.” The Russians roared with laughter.

"And yet,” says Soward, “there was an air of oppressiveness everywhere we went." Hill says: “It’s an oppressiveness that stems from the absence of free speech in a godless, materialistic society.” At the meeting with Khrushchev, Oakley Dalgleish, publisher of the Toronto Globe and Mail, asked a number of questions on political matters. Khrushchev brusquely cut him short, saying, “We are here to discuss business not politics.” P. C. Garratt thought that there was “something RCMP-ish” about the three women interpreters who accompanied them. He noted that the women never took a drink no matter how convivial the occasion. One of the Canadian Embassy staff told Margison that he believed his home and those of some of his colleagues were wired for eavesdropping.

How honest can you be?

Harold McNamara and R. H. Webster, chairman of the Toronto Globe and Mail Ltd., had experiences which suggested to some of the group elaborate precautions on the part of Russians to protect their reputations against charges of dishonesty. McNamara found in his Moscow hotel bedroom a rusty old penknife. He gave it to one of the interpreters with the suggestion that the owner might be found. The interpreter said it was a worthless penknife and advised McNamara to lose it.

Three or four times McNamara deliberately left the penknife lying around in the hotel and each time it was returned

to him by an hotel servant. On leaving the hotel by taxi for an airport he produced the penknife and remarked jokingly to the interpreter that he couldn't lose it, no matter how hard he tried. The interpreter told McNamara to shove the penknife down the back of the taxi’s upholstery. This was done.

A few minutes later the party took off by air for Stalingrad but had to return to Moscow because of bad weather. They slept until five the following morning in the Moscow hotel and arose to set out once more for the airport. In the hotel lobby McNamara was presented by the taxi driver of the previous day with the penknife. He abandoned all hope of losing it and is keeping it as a souvenir.

Webster’s experience was even more curious. On a trip to Leningrad he left one of his bedroom slippers at the hotel. Returning to Moscow he decided the remaining slipper was useless. When the party left for England he left it in a closet of his room. Just as the aircraft was taking off a messenger came rushing up with a parcel for Webster. It contained both slippers.

“This kind of thing,” says A. D. McKee, “made me feel quite eerie. Like the others I was glad to leave Russia. We flew from Moscow in a Russian plane to Prague. There a British European Airways plane was waiting to take us on to London. There was a Union Jack painted on its fuselage and I was never so relieved to see that flag in my life.”

R. J. Adams says: “None of us saw anything to change our minds about the communist system. But the trip gave us plenty to think about. It seems to me there is only one ray of hope. The Russians have got creeping capitalism. We've got creeping socialism. Somewhere down the line it may be possible for the two systems to meet, to reach a compromise, and to work together for the good of the world. Always provided, of course, that we don’t blow each other to hell in the meantime.” ★