Council of Ministers of the U.S.S.R. and the Central Committee of the Communist Party of the Soviet Union, Retail Prices Cut. February 28, 1949

Original Source: Pravda, 1 March 1949.

High prices in commercial trade were abolished and uniform reduced state retail prices were introduced on consumer goods when the currency reform was carried through and the rationing system abolished at the end of 1947. That was the first stage in the reduction of prices of consumer goods. The reduction of prices at the first stage made consumer goods cheaper in state retail trade within a year by at least 57,000,000,000 rubles. That sum constituted a pure loss to the state Budget, which had to be covered, and indeed was covered subsequently, by the Government, owing to the rise of labor productivity, the increase in the production of mass consumption commodities, and the reduction of production costs. But at the same time, it constituted a pure gain for the population.

Matters could not stop at that, however. The reduction of commodity prices within the system of state retail trade was bound to cause, and did cause, a similar reduction of prices on the collective farm and cooperative markets. Since the share of collective farm and cooperative goods in the aggregate mass of commodities sold to the population during the year constitutes approximately 33 per cent, the result was that the reduction of commodity prices in collective farm and cooperative trade made these commodities cheaper by at least 29,000,000,000 rubles.

Consequently, the population has gained altogether approximately 86,000,000,000 rubles during the year as a result of the reduction of retail prices in all divisions of retail trade.

This means that as a result of the reduction of prices at the first stage, the purchasing capacity of the ruble has considerably increased, the value of the ruble as compared to the value of foreign currencies has improved, the wages of workers and intellectuals have appreciably increased, the expenditures of peasants on purchases of manufactured goods have considerably fallen.

In connection with the further rise of the national economy of the USSR, the growth of production of mass consumption commodities and new achievements in the field of reducing production costs, it became possible in the latter half of 1948, to put into practice a new reduction of prices of mass consumption commodities. The Council of Ministers of the USSR and the Central Committee of the Communist Party of the Soviet Union (Bolsheviks) have resolved to carry into reality this new reduction of prices--which already was started in 1948--and to consummate it on March 1, 1949. This will be the second stage in the reduction of prices of mass consumption commodities.

The new reduction of prices, to the extent which is outlined in the present decision, will effect new, additional lessening of prices of mass consumption commodities within the state sector of retail trade by at least 48,000,000,000 rubles over a period of one year. This loss to the state Budget, which at the same time constitutes a pure gain for the population, must be covered and undoubtedly will be covered by the Government by means of a number of economic measures, in spite of the serious difficulties which will have to be overcome in doing so.

Considering the fact that the new reduction of prices in the state sector of retail trade will cause immediate and, in the main, equal, reduction of prices in the cooperative and collective farm sector, it can be conceded that the population will additionally gain not less than 23,000,000,000 rubles as the result of the new reduction of prices of collective farm and cooperative produce.

Consequently, at this second stage, the population will gain altogether approximately 71,000,000,000 rubles in the course of one year as a result of the new reduction of prices in all divisions of retail trade.

This means that as a result of the new reduction of prices, the purchasing power of the ruble will again considerably rise and the value of the ruble will improve as compared with the value of foreign currencies, that real wages of workers and intellectuals will again considerably increase and peasants, expenditures on purchases of manufactured goods will again considerably decline.

The Council of Ministers of the USSR and the Central Committee of the Communist Party of the Soviet Union (Bolsheviks) hereby decree:

A. To reduce as of March 1, 1949, the state retail prices of consumer goods, as follows:

Bread and flower by 10 per cent; cereals and macaroni by 10 per cent; forage grains oilcakes, bran and combined fodder by 20 per cent; hay by 30 per cent; biscuits, gingerbread and cakes by 10 per cent; meat, sausages and tinned foods by 10 per cent; fish and fish products by 10 per cent; cream, butter and processed butter by 10 per cent; cheese and sheep's-milk cheese by 20 per cent; salt by 30 per cent; vodka by 28 per cent; liqueurs by 25 per cent; fortified grape wines, cognacs and fruit and berry wines by 15 per cent; tobacco goods by 10 per cent; perfumery by 20 per cent; coats, suits, dresses and other readymade woolen clothes by 12 per cent; dresses, shirts, blouses and other ready-made silk goods by 15 per cent; woolen fabrics by 10 per cent; silk fabrics by 10 per cent; clothes tailor-made to order, by 20 per cent; cotton thread by 15 per cent; silk stockings and socks, 15 per cent; footwear made of textiles and combined materials by 15 per cent; headgear (hats and caps) by 15 per cent; textile haberdashery by 15 per cent; embroidered articles by 15 per cent; furs by 10 per cent; metal haberdashery and haberdashery manufactured of leather substitutes, by 10 per cent; articles from plastics and celluloid (kitchenware, household utensils, etc. ) by 20 per cent; cutlery (knives, forks, spoons, etc. ) by 10 per cent; household electrical appliances (electric kettles, electric stoves, electric irons, etc. ) by 10 per cent; hardware by 20 per cent; saddlery by 20 per cent; cement by 30 per cent; motorcycles by 15 per cent; bicycles by 20 per cent; radio receivers by 20 per cent; television sets by 25 per cent; pianos, piano accordions and accordions by 20 per cent; phonographs by 30 per cent; phonograph records by 20 per cent; watches and clocks by 30 per cent, jewelry by 20 per cent, typewriters by 20 per cent; cameras and binoculars by 10 per cent.

To reduce correspondingly the prices in restaurants, dining rooms, teahouses, and other catering establishments.

B. To instruct the Ministry of Trade of the USSR to fix, in accordance with the present decision, new reduced state retail prices of food, fodder and manufactured goods enumerated in Paragraph "A" of the present decision.

Chairman of the Council of Ministers of the USSR J. Stalin
Secretary of the Central Committee of the Communist Party of the Soviet Union (Bolsheviks)
G. Malenkov

Source: U.S.S.R. Information Bulletin, Vol. IX, No. 5 (11 March 1949), pp. 141-142.