NOTES

Chapter II

PRODUCT MIX, RAW MATERIALS, AND COSTS

1. Promyshlennost’ 1964, p. 320. In this study we are not considering aluminous cement, an early-hardening cement introduced in 1935 and usually produced jointly with iron in the blast furnace. Its share of hydraulic cement output has rarely been more than 0.1 percent. We are also omitting consideration of cements produced at low heat, which are often claimed to be hydraulic cements but which are not reported separately in official tabulations. These tabulations may include them with the low-strength Portland grades, or they may be excluded altogether, on grounds that they do not really share the hydraulic properties of Portland and portland blends.

2. The Russian definition is contained in State All-Union Standard (GOST) 970–41, published in Stroi mat, sbornik. Also see I. E. Bashmachnikov, “Novye standarty v tsementnoi promyshlennosti,” Ts. (1937), No. 5–6, p. 4. The American definition is given in ASTM, Standards on Cement (1963).

3. The new standards are described in Bashmachnikov, and in S. M. Veller, “Sravnitel’naia otsenka standartov na portland-tsement v stranakh Evropy i Ameriki,” Ts (1937), No. 5–6, p. 10.

4. ASTM (1963), p. 3.

5. In his study of basing-point pricing, Machlup argued that the oligopolistic nature of the American cement industry led to product uniformity and retarded the introduction of new products, since product heterogeneity opens up means of nonprice competition which is difficult to control. This may have been a factor in the adoption of uniform standards in the first place when basing-point pricing prevailed, but the single-grade approach has continued even since basing-point pricing was outlawed in 1948. This suggests that not only the cement industry but builders as well find strength uniformity useful for the simplification in control that it permits. See Fritz Machlup, The Basing-Point System (Philadelphia, 1949), p. 80.

6. Associação Brasileira de Normas Tecnicas, Materials para Concreto e Concreto Armado, Especificaçōes e Métodos de Ensaio (Rio de Janeiro, 1965), p.4.

7. A. Evdokimenko and I. Zubov, “Nazrevshie voprosy novoi klassifikatsii tsementov,” SM (1957), No. 6, p. 23.

8. Robert Herman Bogue, The Chemistry of Portland Cement, (2d ed., Rheinhold, 1955), p. 708.

9. Robert F. Blanks and Henry L. Kennedy, The Technology of Cement and Concrete, Vol. I: Concrete Materials (New York, 1955), pp. 180–185.

10. Portland Cement Association, Structural Bureau, Admixtures for Concrete (1963).

11. Cement input estimates in this paragraph are from V. G. Skramtaev, “Sravnenie raskhoda portlandskogo i putstsolanovogo tsementa na edinitsu ob’ema betona,” Ts (1937), No. 9–10, pp. 5–7; O. A. Gershberg, “K voprosu sravneniia raskhoda portlandskogo i putstsolanovogo tsementa,” Ts (1938), No. 1, p. 43; Iu. M. Butt, Tekhnologiia tsementa i drugikh viazhushchikh (Moscow, 1956), p. 273.

12. GOST 970–41, in Stroi. mat, sbornik, p. 77.

13. Holland Hunter, Soviet Transportation Policy (Cambridge, Mass., 1957), p. 324.

14. The characteristics and trends in Novorossiisk production are discussed in V. Sobolev, “Znachenie estestvennykh mergelei v tsementnoi promyshlennosti,” SM (1932), No. 11–12, and M. Khrennikov, ‘‘Puti dal’neishego razvitiia tsemzavodov Novorossiiskoi gruppy,” SM (1932), No. 2.

15. A. Krupskii, chapter on cements in Departament Torgovli i Manufaktur Ministerstva Finansov, Fabrichno-zavodskaia promyshlennost’ i torgovlia Rossii (St. Petersburg, 1883), p. 98.

16. I. Ponamarev, “Proizvodstvo tsementa iz tverdykh izvestniakov s predvaritedl’nym obzhiganiem izvestniaka,” SM (1932), No. 4, pp. 20–21.

17. The last three paragraphs are based on L. N. Naumova, Puti povysheniia proizvoditel’nosti truda i snizheniia sebestoimosti vtsementnoi promyshlennosti (Moscow, 1961); Iu. S. Lur’e, Portlandtsement (Moscow, 1959), p. 18; and Sots, stroi. 1934, p. 111.

18. M. Gardner Clark, The Economics of Soviet Steel (Cambridge, Mass., 1956), p. 128.

19. Sobolev, SM (1932), No. 11–12, p. 40.

20. Clark, p. 218. Whether the subsidy was restriced only to coal used for steel production or was general for the region is not stated.

21. TNEC, Relative Efficiencyof Large, Medium-Sized, and Small Business, Monograph 13, 76th Congress, 3rd session (1941), pp. 24–25.

22. M. Shmukker, “Normal’nye shtaty dlia proektiruemykh novykh tsemzavodov,” SM (1930), No. 3, pp. 97–98.

23. Z.I. Loginov, Tsementnaia promyshlennost’ SSSR (Moscow, 1960), p. 77.

24. M. T. Bogachik, “Pechnoe khoziaistvo tsementnoi promyshlennosti SSSR,” SM (1931), No. 3, passim. One hundred and fifteen thousand tons was the rated capacity for four 111-meter kilns scheduled for installation at the Gigant plant near Moscow in 1931. They were apparently not installed in that year, however, and, indeed, the length of the construction period is a major fault of the very large plant (see section D. 4).

25. Sots, stroi. 1934, p. 111.

26. A. Greiman, “O postroechnoi stoimosti novykh tsementnykh zavodov,” SM (1931), No. 2 -3.

27. This average cost is based on the 1929/30 prices weighted by the regional shares in production. The latter were taken from “Novye metody sostavleniia balansa stroitel’nykh materialov i ikh raspredeleniia mezhdu stroiiashchimi organizatsiami,” NS (1930), No. 7–8.

28. Shmukker, SM (1930), No. 3, pp. 97–98. This article has a somewhat tentative character—that is, it does not claim to represent final authority on the matter (the editors of the journal present the article as a “statement of the problem”). Nevertheless, since it is one of the few available pieces of information on cost behavior under varying plant size, we must examine it carefully.

Shmukker derives his labor force sizes by building up from the hypothetical norms for the various departments. He then compares these hypothetical labor force sizes with those actually scheduled for six plants then in construction and gets good agreement on four. He shows a tendency to overstate the size of the labor force needed for small plants and to understate on large plants (about 10 percent in each case), revealing a prejudice for large scale. It may be, therefore, that his estimates of labor savings in large plants are overstated.

29. Sots, stroi. 1934, p. 111.

30. TNEC, Monograph 13, p. 22.

31. Joe S. Bain, Barriers toNew Competition (Cambridge, Mass., 1956).

32. The always thorny problem of rail cost estimation is compounded by the severe inflation taking place throughout the 1930’s. We attempt to resolve the latter difficulties by using two cost estimates—one for 1930 for use in the scale-transport trade-off being discussed here in terms of the situation of 1930, and one to compare to the 1932 cement cost data (the 1932–35 prices). We start by considering the rail cost function.

The most difficult problems in estimation of the cost function are introduced by topography and length of haul. We may abstract from regional cost differences because for most of the analysis we will not be concerned with extreme topography such as that which characterizes the Transcaucasian region (a linear programming analysis in Chapter V excludes the republics in this region). This minimizes the problem of regional transport cost variation.

The relationship between length of haul and average cost is a little more perplexing, but we feel that an assumption of constant costs for the carrying operation is reasonable for our purposes. Now, it is in fact usually the case that average total transport costs per kilometer do decline with increasing length of haul. The main source of declining cost, however, is loading and unloading costs, which are fixed costs to be averaged over the journey. If we neglect these, the cost of carriage itself is much more nearly constant. For any given volume of freight, the cost of loading and unloading is the same, no matter what the pattern of lengths of haul of individual shipments unless some patent foolishness prevails (for example, if less-than-carload lots are shipped extensively or if the product is loaded and unloaded several times while going from some specific origin to a given destination). We can abstract from these costs, then, since they must be incurred in any event. Marshaling yard operations partake of the same nature—their cost per kilometer declines as the haul lengthens, but for a given volume of product—which is the problem for which we will be making various comparisons—approximately the same cost is involved no matter what the shipping pattern. Hence, as a first approximation the assumption of linear transport cost functions appears to be justified for our purposes, and in a moment we will present some empirical evidence supporting this view.

How much was the average cost per kilometer in the prewar period? For most commodities the same railroad rate structure had existed through the 1930’s, a general rate revision being introduced in 1939. The main feature of the new structure was to discourage long hauls. While the revised 1939 rates were all higher than those existing from 1930 to 1939, the increases on shipments of more than 250 kilometers were much greater than on short hauls. As a result, the average charge per kilometer was much more nearly constant than under the old rate. The new incremental rate declined by less than 10 percent per kilometer on shipments between 250 and 500 kilometers and was almost constant thereafter. The following table compares the incremental rates existing previously in the decade with the schedule introduced in 1939.

According to Kuchurin, the new cement rate was such as to average 20.1 percent greater than the cost of transport (sebestoimost’). Since, in the 1930’s, over 90 percent of rail shipments of cement traveled more than 250 kilometers, it is evident that the approximate linearization of the rate structure reflected the cost situation much more accurately than did the previously sharply declining schedule. We will, therefore, base our cost estimate on the 1939 rate, adjusted for the 20 percent excess over cost just noted. This gives average cost of 2.22 kopeks for all distances and 2.15 kopeks for hauls beyond 250 kilometers considered alone. Loading and unloading costs, when they must be considered as well, will be added to the carrying cost. See S. F. Kuchurin, Tarify zheleznykh dorog SSSR (Moscow, 1957). The rates for cement are given on page 37, and the relationship between revenues and costs is given on page 44.

We have still to cope with the inflation. According to Holzman the rate of inflation in industrial goods between 1930 and 1939 reached 109 percent, while inflation in other areas was higher. See Franklyn Holzman, “Soviet Inflationary Pressures, 1928–1957,” Quarterly Journal of Economics, 74 (1960), 168. Hunter (p. 340) shows that the average unit cost in railroading (cumulated ton-kilometer) in the same period rose by an almost identical amount—107 percent. It would seem, therefore, a matter of indifference whether we deflate by the one or the other index. We will use Hunter’s index. Deflating the 2.22-kopeck figure for 1939 gives 1.07 kopecks for 1930 and 1.2 kopecks for 1932. These costs will be used in our analysis. (The ratio of 1930 and 1939 unit costs is 0.4838, and that between 1932 and 1939 is 0. 5465.)

33. From time to time we will have to use an estimate of dust loss for our spatial analysis. This note may serve as a reference for such occasions.

Information on dust loss is fragmentary. A writer in 1934 says that the amount lost en route frequently is as high as 20 percent or more (Kisliatkov). Presumably this was on very long trips. Another writer in 1939 says that shipping in containers will save 10–13 percent (Ermakov). It is not clear whether he means 10–13 percent of total industry production or 10–13 percent of that part of output that was shipped in bulk—about 70 percent of total. Finally, Loginov in 1957 estimates the dust loss as 10–12 percent for all operations (loading, carriage, unloading). He says that only a 2 percent loss was actually incurred en route in the boxcar (this was the way bulk cement was usually shipped before World War II). Loginov’s estimate, even if accurate for 1957, is probably low for the 1930’s, given the pressures of the period; part of the loss, for example, is due to failure to cover the floorboards of the boxcar properly with a tarpaulin. Carelessness must have been more extensive in the 1930’s, as witness a decree, as late as 1937, showing that cement was being shipped in open cars (the decree forbade this practice).

The sources cited are L. A. Kisliatkov, “Za perestroiku standartov na stroimaterialy,” SM (1934), No. 7, p.41; I. Ermakov, “Konteinery v tretei piatiletke,” Sotsialisticheskii transport (1939), No. 9, p. 6; Z. I. Loginov, Razmeshchenie proizvodstva iperevozki tsementa (Moscow, 1957), chap. IV; SNK SSSR decree No. 2041, Ts (1938), No. 1, p. 12.

34. Second Five Year Plan, Vol. II, p.365.

35. Ibid., p. 507.

36. S. P. Preobrazhenskii and V. N. Iung, Silikatnaia promyshlennost’ Severnoi Ameriki (Moscow, 1928), p. 89.

37. I. Radkevich, “K voprusu o razvitii syrevoi bazy tsementnoi promyshlennosti,” SM (1956), No. 11, p. 16.

38. Loginov, Tsementnaia promyshlennost’ SSSR, pp. 41–43.

39. E. I. Khodorov, Pechi tsementnoi promyshlennosti (Moscow, 1950), chap. II.

40. Shaft kiln data from K. M. Grinev and M. N. Krasheninnikov, “K voprosu o stroitel’stve tsementnykh zavodov malykh moshchnostei,” Ts (1947), No. 4, p. 15. Industry averages from L. N. Naumova, Puti povysheniia, pp. 18, 92. Both industry averages refer to 1951.

41. Bogachik, “Pechnoe khoziaistvo,” pp. 16–19.

Chapter III

ADMINISTRATION AND OPERATION OF THE INDUSTRY

1. This section is based on the following sources: Promyshlennost’ 1924, pp. 268–269; Z. I. Loginov, Tsementnaia promyshlennost’ SSSR, pp. 48–49; F. A. Shober, Fabrichno-zavodskie predpriatiia Rossiskoi Imperii (1914); and RSFSR Plan. Actually there is some ambiguity in the last-named volume, which counts the Leningrad and Eastern Siberia plants in Novorostsement (p. 28) as well as in the list of local industry projects (pp. 160, 183) along with other plants not mentioned in the trust industry table of page 28. The plan for the Podgornoe and Belgorod plants was not ambiguous, however.

2. STO and SNK SSSR, decree No. 309, “Ob organizatsii ob’edinenii ‘Souiuzstroi’ i ‘Soiuzstroimaterial,”‘ October 14, 1930, in NS (1930), No. 19–20, p. 865.

3. STO SSSR, decree No. 323, “Ob izmenenii postanovleniia soveta truda i oborony ot 21 Dekabria 1928 g. ob uporiadochenii snabzheniia stroitel’nymi materialami,” October 21, 1930, in NS (1930), No. 19–20, p. 865.

4. Memberships and plant affiliations are indicated in Kazanskii 1934a, pp. 5–7; P. Sinitsyn, “Rabota mestnoi promyshlennosty stroimaterialov za pervoe polugodie 1935 g.,” NS (1935), No. 18, p. 24; and Brodskii 1937b, p. 34.

5. Kazanskii 1934a, p. 5.

6. The problem of definition arises here. Following his enumeration of Soiuztsement plants, Kazanskii lists the plants subordinate to the metals ministry, together with those in the Transcaucasus and the Uzbek SSR, as belonging to “other associations.” To this list he appends the two plants in “local industry.” Brodskii in 1937 speaks of one of the Uzbek plants as belonging to “local industry” (Brodskii, 1937a). Observers were anything but consistent in their use of the term “local industry.” For example, a writer in 1927 says that a precise definition of “local industry” does not exist, but that in practice the term usually means that part of state industry which is run by a local guberniia or by an oblast organ. The book goes on to say that, although frequently the operations are small, are in consumer goods industries, and operate to service local needs, sometimes they are large and their significance extends far beyond the borders of their locale. This can be seen clearly in a table in which the average guberniia plant in local industry is shown to employ a labor force of 287. Gosplan RSFSR, Mestnoe Khoziastvo RSFSR (1927), pp. 120–123.

7. Brodskii 1937a, p. 36.

8. N. S. Svetlov, “Itogi raboty tsementnoi promyshlennosti za 1939 g. i 4 mes. 1939 g,” Ts. (1939), No. 7, p. 23.

9. Organizational membership ibid., p. 26. Svetlov (p. 27) also mentions what appears to be a new line of command, the administrations being subordinated to a new ministry, the People’s Commissariat for the Building Materials Industry.

10. This paragraph is based on Promyshlennost’ 1924, p. 268, “Novye metody,” pp. 275, 277, and “Perspektivy razvitiia,” p. 98.

11. Brodskii 1937a, p. 36. The production of the Kuvasai plant in Uzbek SSR, which was in local industry, may have been marketed by Soiuzstromsbyt, since it is included in Brodskii’s origin-destination table, which appears to relate only to the cement marketed by Soiuzstromsbyt. The same is not true of the Leningrad Vorovskii plant, the Podol’sk plant near Moscow, and the Pervomaisk plant in Novorossiisk, all local industry (Brodskii 1938, p.6).

12. Spravochnik 1936, pp. 15, 30.

13. It is instructive in this regard to recall the full titles of the handbooks we have been citing. That of the 1935 handbook, for example, is Estimating Handbook of 1935 Planning Prices of Materials Usedin Construction, Labor, and Railroad and Water Transportation. The 1936 title was similar.

14. I have not seen the zone-of-delivery price system discussed in any of the Soviet journals or by A. N. Malafeev in his useful book on the history of price formation, Istoriia tsenoobrazovaniia vSSSR, 1917–1963 (Moscow, 1964). The earliest price handbook I have seen containing information on the zones was published in 1956, Spravochnik 1956. This handbook lists five price zones.

Roman Bernaut and Abram Bergson in their study of cement prices, Prices of Cement in the Soviet Union (RAND Corp., 1954), cite a 1949 handbook of zonal prices. They reason that the actual switch to the zonal system occurred in 1941, because prices are quoted on a delivered basis in Leningrad oblast planning commission handbooks for 1941 and 1948 (Leningrad Handbook 1941 and Leningrad Handbook 1948).

15. Machlup, The Basing-Point System.

16. Ibid., p. 193.

17. See especially Alec Nove, “The Problem of ‘Success Indicators’ in Soviet Industry,” Economica, 25 (1958), pp. 1–13.

18. Naum Jasny, The Socialized Agriculture of the USSR (Palo Alto, 1949).

19. Loginov 1959, p. 63.

20. Ibid., pp. 58–59.

21. Sots, stroi. 1934, p. 113, and Sots, stroi. 1936, p. 183. In these two sources trass cement, a kind of pozzolan cement produced in Novorossiisk, was recorded separately. Also see the book of forms to be filled out in conjunction with the plan: NKTP SSSR, Formy kintrol’nykh tsifr tiazheloi promyshlennosti na 1933 godi ukazaniia po ikh zapolneniiu (Moscow, 1932), p. 162.

22. See, for example, Kazanskii 1934a, p. 8; and Kazanskii 1938, p. 16.

23. Gosplan SSSR, Ukazaniia i formy k sostavleniiu narodnokhoziaistvennogo Plana na 1936 god (Moscow, 1935), pp. 3, 54.

24. Spravochnik 1935, p. 26. Barrels were supposed to be returned for re-use. In this case the 25-ruble charge should be averaged over several tons. But to it should be added whatever cost is involved in returning the empties. It may be that this return cost was negligible because the cars had to go back anyway, probably empty (from the Far East, for example). In any case, as the discussion here shows, cement producers did not like the barrels even at the higher prices they commanded, and efforts were made to minimize their use. See the following decrees regarding disposition of barrels: VSNKh SSSR and NKT SSSR Decree No. 610/ 258, “Polozhenie o premirovanii stroitel’stv vozrashchaiuchikh taru sverkh kolichestv predusmotrennykh v p. 1 prikaza VSNKh SSSR i NKTorga SSSR ot 1/15/30 g.,” January 15, 1930, NS (1930), No. 9–10, p. 397; EKOSO RSFSR, “Ob ob’iazatel’nom vozvrate tary izpod stroitel’nykh materialov,” August 21, 1930, NS (1930), No. 15–16, p.669.

25. Preobrazhenskii and Iung, p. 89.

26. “Perspektivy razvitiia,” p. 99.

27. A. L. Samoilov, “ Material’no-tekhnicheskoe snabzhenie v pervom polugodii 1936 g.,” Ts (1936), No. 10, p. 43.

28. A. Smurov and S. Slivitskii, “O perevozkakh tsementa,” Ts (1936), No. 7, p. 45.

29. The Third Five Year Plan projected an increase of 70 percent in cement capacity. See Third Five Year Plan, p. 225.

Chapter IV

EFFICIENCY IN LOCATION

1. See, for example, V. Bykovskii, “K voprosu o razmeshchenii tsementnoi promyshlennosti,” PKh (1939), No. 2.

2. S. S. Balzak, V. F. Vasyutin, and Ya. G. Feigin, Economic Geography of the Soviet Union (New York, 1949), pp. 305–306.

3. P. N. Stepanov, “Geografiia promyshlennosti stroitel’nykh materialov,” in G.N. Cherdantsev, et al., eds., Ekonomicheskaia geografiia SSSR (Moscow, 1958), p. 137.

4. D. V. Gorskii, “Tsementnaia promyshlennost,” NS (1937), No. 21, p. 71.

5. These projections of consumption and production appear to have been made and published in RSFSR Plan even while USSR First Five Year Plan was announcing investment plans quite different from these in RSFSR Plan; according to the USSR Plan, five plants were to be built in Western and Eastern Siberia (the three in Western Siberia near Novosibirsk). None was undertaken in Eastern Siberia—indeed, there was no production there until 1945 (Promyshlennost’ 1957, p. 279)—and none was planned for the Far East, although, as the First Plan developed, the giant works at Spassk were begun. Because of this inconsistency we do not know how firm the investment plans were.

6. RSFSR Plan, Vol. II, pp. 173–174.

7. There was published in 1930 a breakdown by Union ministry and republic Gosplany (All-Union ministries were allotted about 60 percent, republic Gosplany, about 40 percent). While it is true that the use by such a ministry as NKPS is more or less coextensive with a sector (transport), the same cannot be said of VSNKh or of a republic Gosplan. The result is that the table is not of much value. (This table is in “Novye metody, p. 276.) After 1930 even tables as ambiguous as this are not presented. In 1935 there is a brief table for the Union ministries alone, and a mention of broad-use categories: construction, 95 percent; production (of concrete components), 4 percent; retail, 1 percent. A. Ambartsumov, “Itogi pervogo polugodiia 1935 g. po snabzheniiu tsementom narodnogo khoziaista,” NS (1935), No. 18, p. 27.

8. Promyshlennost’ 1964, p. 320.

9. Second Five Year Plan, pp. 103, 282.

10. Cement prices and handling costs from Spravochnik 1935, pp. 25–26, 268. Transport costs based on distances estimated in connection with linear program analysis of Chapter V and on transport cost estimate of 1.2 kopecks per ton-kilometer developed in Chapter II (see above, Chapter II, n. 32).

11. See, for example, F. Gaposhkin, “Bor’ba s gigantomaniei—vazhneishaia narodnokhoziaistvennaia zadacha,” PKh (1939), No. 4.

12. Brodskii 1937a, pp. 38–39; Brodskii 1938, pp. 6–7.

13. F. A. Shober, ed., Fabrichno-zavodskie predpriatlia Rossisskoi Imperii (1914).

14. Bykovskii, PKh (1939), No. 2, p. 95.

15. Ibid.

16. 1.1. Kholin, Spravochnik po proizvodstvu tsementa (Moscow, 1950).

17. Clark, The Economics of Soviet Steel, chap. 8.

18. M. Khrennikov and N. Meliushev, “Osvoenie novykh teckhnicheskikh norm obzhigatel’nykh pechei v tsementnoi promyshlennosti,” Ts (1936), No. 11, pp. 2–13.

19. The discussion preceding the Ural-Kuznetsk undertaking involved a coal shipment rate which, it was claimed by opponents of the combine, understated shipping costs badly. For details on the ambitious undertaking, which envisaged the joining of Ural iron ore and West Siberian coal, see Franklyn Holzman, “The Soviet Ural-Kuznetsk Combine: A Study in Investment Criteria and Industrialization Policies,” Quarterly Journal of Economics, 71 (1957), 368–405.

20. I. E. Bashmachnikov and Z. Loginov, “O rekonstruktsii Leningradskogo tsementnogo zavoda (po materialam ekspertnoi komissii),” Ts (1934), No. 1.

21. N. S. Svetlov, “Itogi raboty tsmentnoi promyshlennosti za 1936 g. i 4 mes. 1939 g.,” Ts (1939), No. 7.

22. V. Shneider and G. Brodskii, “Itogi i perspektivy razmeshcheniia tsementnoi promyshlennosti,” PKh (1939), No. 2, pp. 95–98.

23. Kazanskii 1937, p. 50.

24. In this analysis we are using actual consumption rather than some indicator of demand such as we presented in section B. 1. Thus we are assuming that consumption, while it may not have been what the original plans would have implied, was at least dictated by such plans modified in consonance with some larger national economic interest rather than by regional autarchy. In the latter case regional consumption totals would simply reflect the economic power of regions having production under their own jurisdiction, and any complete analysis would have to uncover the further waste inherent in neglect of important priorities in other regions. There are several reasons to believe that consumption tended to be determined independently of regional cement production capacity.

We may divide cement demand into two sources: (1) demand for use in construction of the type that would normally require cement in a given region, and (2) the substitution of cement (as an input in concrete) for other materials normally used in the construction of certain structures in that region (these two categories are somewhat oversimplified, and in practice there would be many examples in which the source of demand would not be so clear-cut). The latter source of demand represents the demand that would generally follow increased production, whereas the former is the actual or projected consumption that would normally lead to new cement capacity. This is the demand that would arise in the basic capital construction plans, which were changing the economic map of the country and were decided at the highest planning levels, independently of the existing regional distribution of cement capacity. Indeed, the industry even complained that delays in transmission of demand requirements complicated its job of production target allocation among existing plants (Kazanskii 1934b).

Cement was a scarce commodity throughout the period, and the several organizations responsible for its use took steps to limit its expenditures. Maximal input coefficients are given for cement (as well as for other important building materials) for use in different types of construction projects in the RSFSR in 1929 and 1930. Stroitel’naia komissiia RSFSR, “O normakh raskhoda glavneishikh stroitel’nykh materialov i rabochei sily na ukrupnenyi izmeritel’ pri vozvedenii zdanii i sooruzhenii torgovo-promyshlennogo i kommunal’nogo stroitel’stva,” March 1, 1930, NS (1930), No. 5–6, pp. 237–243. An All-Union directive in 1931 gives limits for residential construction and goes on to say that actual input should be reduced even further by various means, including the substitution of lime-pozzolan for portland cement in concrete. Gosplan SSSR, “Normy raskhoda glavneishikh stroitel’nykh materialov na kub. met zhilykh zdanii obobshchestvelennogo sektora,” May 28, 1931, NS (1931), No. 11–12, pp. 456–457. Building organizations were not even permitted to reschedule building materials use and borrow supplies intended for one project for use in another. “Novye metody sostavleniia balansa stroitel’nykh materialov i ikh raspredeleniia mezhdu stroiiashchimi organizatsiiami,” NS (1930), No. 7–8, pp. 280–281. The marketing agency also appears to have exercised care in processing cement orders; it compared requisitions against engineering norms, for example. All this suggests that the substitution of cement for other building materials must have been limited and that the use of cement in any region must have been confined to the important projects for which it was centrally planned—that is, it was not used freely as a substitute for other materials simply because it was produced in the neighborhood.

Chapter V

EFFICIENCY IN THE SHORT RUN

1. See, for example, the discussion and statistics on operating rates in Khrennikov and Meliushev, Ts (1936), No. 11.

2. Hunter, pp. 156–160.

3. Brodskii, for example, in 1937 presses for greater use of water routes in the Third Five Year Plan (Brodskii 1937a, p. 41, and Brodskii 1935b, p. 28).

4. See, for example, V. Nakaznoi, “Sravnitel’naia stoimost’ zheleznodorozhnykh i vodnykh perevozok stroimaterialov maloi skorost’iu,” NS (1936), No. 10.

5. See, for example, Brodskii 1937a, pp. 38–39.

6. See appendix for calculation of the minimum rail distances.

7. Brodskii 1935a, p. 12, and Loginov, Tsem. prom., p. 146.

8. Smurov and Slivitskii, p.44. The 1935 (second half) figure given here is about 10 percent higher than Brodskii’s Soiuztsement figure given in Table IV-1. The discrepancy may be due to the use of different bases for calculating, the Brodskii data apparently using truck tonnage but not truck ton-mileage in some years.

9. This is suggested by 1936 first-half production of 58,000 tons (Brodskii 1937a, p.39). This increase appears to have been secured by 1935. Capacity in 1933 (at the old Spassk plant) is believed to have been around 12.0–15.0 thousand tons (cf. Brodskii 1937a, pp. 36, 40; and Brodskii 1935a, p. 10.

10. The average haul was 11,157 kilometers in 1933 and 11,666 kilometers in 1934 (Brodskii 1937a, p. 37).

11. Brodskii 1935a, p. 10.

12. Although total production in 1936 was 5.8 million tons, a disproportionately small amount must have been produced in the first half, since the new regulations on hydraulic additives to portland cement took effect in March (see notes to Table IV-2). Through considerations of the time of introduction of the new specifications and a probable slight lag in gearing facilities to the additives, production for the first half of 1936 may be estimated at almost exactly 2.7 million tons.

13. James M. Henderson, The Efficiency of the Coal Industry (Cambridge, Mass., 1958), especially pp. 85–86.

14. A. Ghosh, Efficiency in Location and Interregional Flows (Amsterdam, 1965), pp. 55–56.

15. Spravochnik 1935, p. 25. The various regional prices given there for the three grades are averaged to yield 22.60 rubles, 25.80 rubles, and 32.25 rubles for 0, 00, and 000 respectively.

16. A. Evdokimenko, “Sebestoimost’, tsena, i effektivnost,” Ekonomicheskaia gazeta, February 3, 1965, pp. 5–6.

17. Promyshlennost’ 1964, p. 320.

Chapter VI

CONCLUSION

1. Hunter, p. 31.

2. All 1958 data from Loginov, Tsem. prom., pp. 134–135, 142.