tainly the Japanese and the West Germans and others are higher than the Soviets, starting from a high base.

This in itself of course, the fact that the rate of increase levels off, isn't a problem for them except in their propaganda. They have made a lot of this in recent years. But the actual increase, of course, is very great. Their steel production now, I think, is 70 million tons a year, something like that-getting close to ours. The actual physical increase last year was something like 5 million tons. Even though the rate of increase is less than it was, the actual increase is very great.

MEETING GOVERNMENT PLANS

One thing that is very important to them is the government plan. Now, this to us wouldn't necessarily mean so much. If you have a goal, as we have, in certain areas-if you don't meet it, if there are good reasons for it, that may not bother you too much. But with them, their whole psychology is based on plan fulfillment. The manager of a factory, if he doesn't meet his plan, even though the government failed to provide him with any raw materials, is punished, and all of his employees suffer from it. So their whole psychology is geared to the fact that if you don't meet the plan, somebody is in trouble.

Certainly in agriculture we are convinced they cannot conceivably meet their plan, and in industry I think there are signs now they are not going to meet that either. Their investments are falling behind their plan, and the increase in productivity is not keeping up with the plan.

One of the things that they have found out very clearly is that they can only operate on the basis of incentives. They freely admit this now. The difficulty is to provide the incentives. With these strains on their resources, they are finding that hard to do.

Their goal, of course, is to try to get into what they call the era of communism. They are now in socialism. They want to get in the era of communism in the next 10 to 20 years. Although their 20year plan calls for providing certain things without payment-free transportation in the cities and things of that sort-they have admitted even in their plan that they are going to have to provide incentives to about half of the income of their people, even after they get to this 20-year goal.

DIFFERENCES BETWEEN SOCIALISM AND COMMUNISM

Senator CAPEHART. What is the difference, as they see it, between socialism and communism?

Mr. THOMPSON. The main difference is that under socialism it is from each according to his ability, to each according to what he produces, and under communism it is according to his need. In other words, theoretically, in time, everybody would get what he needs, and is supposed to like work well enough to work regardless of the fact that everything is supplied to him.

They don't, of course, pretend that they would have absolute equality right across the board-some people would need better houses than others, and better transportation, and so on. But it

means that everything would be provided, and people would just work out of the love of it.

The greatest failure, I think, of all is that they have not produced this new Soviet man they have been talking about, that is supposed to have all these qualities. And the papers are full of stories of people engaging in private enterprise in every way. A lot of them get caught and a lot don't.

EXECUTIONS IN THE SOVIET UNION

Senator CAPEHART. Have they executed a lot of people recently in respect to the food situation?

Mr. THOMPSON. Not so much food as speculation-people dealing in foreign currencies, selling government supplies.

Senator CAPEHART. How many, do you have any idea?

Mr. THOMPSON. We have read of sentences of, I think, something like 8, 10.

Senator CAPEHART. Are they primarily Jewish people?
Mr. THOMPSON. Three of them were.

VOTES AGAINST KHRUSHCHEV

Senator WILEY. How do you interpret that vote-slightly over a million didn't vote for Khrushchev?

Mr. THOMPSON. This still was a very high percentage that he got, regardless. But there are a lot of people that don't like his policies, because they have suffered under them. For example, the people that were on these machine tractor stations, when those were abolished, they had to go to work on the farms and they didn't like it. Other people are opposed to his educational policies. There are people who lost their jobs, that were good jobs, and they are against him. There are always bound to be some, but it is not very significant. I think generally speaking he is pretty popular with the mass of people throughout the country.

DANGEROUS SITUATION IN BERLIN

Senator WILEY. Will you tell me what your ideas about Berlin are? That is what I asked you-when you said you were optimistic. What is your optimism as to Berlin?

Mr. THOMPSON. Senator, when I said that, I put aside the question of Berlin.

The CHAIRMAN. Except for Berlin.

Mr. THOMPSON. I think on Berlin that it is pretty clear we are not going to get an agreed settlement that settles the problem. Our positions are too far apart. I don't think we can reconcile them. But I think there is fairly good hope that we will get some means of dealing with the fact of disagreement so that we don't have a real conflict.

It is a very worrying and dangerous situation-the harassment going on, in itself, is very dangerous.

SOVIET MILITARY STRENGTH

Senator CAPEHART. Do you believe they are getting militarily stronger each day?

Mr. THOMPSON. On a relative basis, I would doubt it. It is very difficult for me to pass a judgment on that. I think in the past year-probably we are better off relatively than we were a year

ago.

Senator CAPEHART. You mean the Russians are?

Mr. THOMPSON. That we are.

Senator CAPEHART. My question was, are the Russians getting stronger each day?

Mr. THOMPSON. They are getting stronger, they are building up their strength, but whether or not it is relative to ours, I don't know.

Senator CAPEHART. My question is whether they are building up their strength.

Mr. THOMPSON. I think so.

Senator CAPEHART. Both in air and missiles and on the ground? Mr. THOMPSON. Undoubtedly. They claimed to have increased their budget by something like the equivalent of between $4 billion and $5 billion. They are getting something for that.

Senator CAPEHART. Is their biggest weakness at the moment the farms?

Mr. THOMPSON. Yes, sir; I think their agriculture is their biggest weakness.

Senator CAPEHART. Is it worse this year than it was last?
Mr. THOMPSON. Yes, because of the population increase.

SOVIET RELATIONS WITH CHINA

The CHAIRMAN. What is their relation with China? Can you enlighten us any about this? We read a great deal of a divergence of their policies, that all their technicians have been withdrawn and

so on.

Can you give us any views about that?

Mr. THOMPSON. Every sign we get is that it is getting deeper. I think it is fundamental. They may patch it over outwardly for a while, but I don't think they can cure it.

There are a lot of reasons for it. One is that nationalism seems to be stronger than communism on both sides. The leadership of the bloc is at stake. The Russians certainly don't want to give it up. The Russians are worried about the population explosion in China-15 or so million increase a year is something they should be worried about. They have a lot of relatively empty land there next door to them. And by nature they are antipathetic. I think the Russians have an inferiority complex, and the Chinese a superiority complex. This is a good formula for trouble. As far as we can tell, generally speaking, they just don't like each other.

And then they have their ideological differences, because China is in a different phase of the revolution than the Soviet Union. The Soviet Union has reason to want stability while they develop their internal plans, and the Chinese, because of their internal difficulties, like foreign diversion. The Chinese are interested in getting Taiwan, which is of little interest to the Soviets and so on. Actually I think the Soviet Union has been engaged in a policy of containment of China for quite some years. This money they have put into Indonesia, for example, which is an area which, if they were coop

erating, would have been a Chinese area, because they have a big local Chinese population.

INDUSTRIAL EXHIBITIONS IN MOSCOW

Senator CAPEHART. Have they expanded their permanent industrial exhibitions in Moscow?

Mr. THOMPSON. They add a little every year.

Senator CAPEHART. Is it still operating?

Mr. THOMPSON. Yes.

Senator CAPEHART. Do they still have dozens and dozens of groups that come in each day from all over the world?

Mr. THOMPSON. Yes, and they use this, not only for showing foreigners what they are doing, but the education of their own people. Senator CAPEHART. Are there as many or more foreign groups as there were a year or 2 years ago?

Mr. THOMPSON. Well, there were certainly less Americans this past year.

Senator CAPEHART. Lots of Latin American groups?

Mr. THOMPSON. Yes, a lot. There are a lot of Indians. Africans have increased. But the Chinese of course have decreased.

Senator CAPEHART. Any Cubans?

Mr. THOMPSON. Yes, a lot of Cubans.

Senator CAPEHART. Have you any reason to believe they are training Cuban fliers in Russia?

Mr. THOMPSON. As far as I know, not in the Soviet Union. We have had reports of training in Czechoslovakia.

SOVIET FACTORIES

Senator CAPEHART. Do they still have pictures up in all their factories of their workers?

Mr. THOMPSON. Yes; they have taken down a lot of pictures of Stalin, and a lot of statutes.

Senator CAPEHART. Interesting thing. You go through the factory and there are all sized pictures. You ask what it is. "Well, that is a picture of some worker that did some outstanding thing."

Is that big lathe factory still going in Moscow?

Mr. THOMPSON. Yes.

They also, in all their factories, have-their whole concept is victory and defeat, win the battle of this, and overtake the United States and so on.

The CHAIRMAN. They are still talking about that.

Mr. THOMPSON. Yes; they have stopped talking about overtaking us in meat production, because they have already passed the time when they said they would do it.

AGRICULTURE AND THE SOVIET STANDARD OF LIVING

Senator SPARKMAN. What effect does the shortage of agricultural production have upon the Russian economy? Is it dangerous, are they faced with famine, or did they just fail to come up to certain standards and goals?

Mr. THOMPSON. There is no danger of famine. The people have been led to expect and they want a better standard of living, better

life. I think the main effect of it, as far as it affects us-it is the thing I was talking about a little earlier-their need to find investments to bring it up.

This year there were very serious shortages for short periods of time in various places, including Moscow. This is because their total pie they were dividing was so tight that their distribution not being good, some areas would go without meat for a week or more, and then get supplies in again. But there is no question-they still have lots of bread.

Senator CAPEHART. You are not conscious of anybody being hungry.

Mr. THOMPSON. No; but of course, looking to the future, it isn't good enough if they stand still in agriculture. They have to go ahead.

Senator SPARKMAN. What about the consumer goods?

Mr. THOMPSON. There has been a steady increase up until now, very slow. But I think now, because of this need to find investment from other places, they are going to have to take it away from consumer goods-at least not increase it, not continue to increase it.

GROUP PRESSURE IN SOVIET SCHOOLS

I had an interesting insight this year. I have an 8-year-old girl in a Russian school, and I learn a lot from her I can't get directly. It is a neighborhood school in front of where we live. We have gone to some of the parent-teachers meetings and see how the system operates.

The CHAIRMAN. How about the schools? Are they pretty good?

Mr. THOMPSON. On the main it is very good. It is different than I had thought because you think of them as being very strict disciplinarians, and they are not. My child says the teacher has more trouble keeping order than the teacher in an American school.

On the other hand, she came home one day and said, "I don't know how they do it; they have made me want to work." The way they do it, the child does well, he gets up in front of the class, they praise him. If he does badly, he is criticized in front of everybody. And they almost force the parents to come to these meetings, and they discuss each child in front of the whole group of parents. Then the parents are brought in, and group pressure is put on them. They make a great business about getting good grades. And they really want to work.

The CHAIRMAN. This is really applying the incentive system to education, the reward and punishment. We accept everybody as being equal, a few being more equal than others.

Senator CAPEHART. Over there the emphasis is on the individual, what he personally can do himself, his own mind and his own muscle.

Mr. THOMPSON. They have a problem in that, Senator. These are rather homey examples. They sit two by two at the desk. There is another little American boy in this class, who didn't know Russian very well. My child knew it better. This little American boy started drawing on his wrist with his pencil, and the Russian boy started imitating him, doing the same thing. The teacher caught the Russian boy and started scolding him. My child knew the American