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individuals, and many of them were given fairly important state offices.

During the Polish and Hungarian crises in the autumn of 1956 East Germany remained relatively calm. The arrest and subsequent conviction and imprisonment for 10 years of Wolfgang Harich, a young professor of Marxist philosophy at Humboldt University in East Berlin and the most outspoken of the intellectual critics, served to discourage open rebellion. Less severe reprisals in the form of removal from jobs, demotions, and reprimands were meted out to other "deviationist" SED intellectuals. The fact that dissident individuals could still escape to the West was also a reason for the lack of widespread active resistance during this period.

The next challenge to Ulbricht's party leadership was far more serious, as it was led by Karl Schirdewan, Politburo member and heir presumptive to Ulbricht, and by Fred Oelssner, the SED's chief ideologist. Both men opposed Ulbricht's desire to increase the pace of "socialization," mainly on grounds of economic effiency but apparently also because they thought that such changes would impede German reunification. Other high party officials backed the dissident leaders, as did Minister for State Security Ernst Wollweber.

The showdown came in February 1958 when Schirdewan, Oelssner, and Wollweber and their followers were purged. Schirdewan and Wollweber were accused of "factional activities," i.e. opposing Ulbricht. The following year, however, all except Wollweber issued public recantations of their earlier positions and pledged their loyalty to Ulbricht. This was to be the last of the sweeping purges of the Politburo, and for the next decade or so that body was to be a daily reliable instrument of the party leadership.

Ulbricht plunged forward with a program of accelerated "socialization," and "decentralization" on the Soviet model, and economic expansion on the basis of a Seven Year Plan - all obediently rubber-stamped by the Fifth Party Congress, held in July 1958. The harsh farm collectivization drive in early 1960, coincidental moves to subject remaining members of the middle class to more stringent controls, and, a year later, the hasty realignment of East German industry to make the country "invulnerable" to West German economic countermeasures, led to serious economic problems and mass flights to the West. Despite the promise of more moderate policies, only the harsh security measures associated with the building of the Berlin Wall halted the refugee exodus and prevented the probable collapse of the Ulbricht regime.

The Berlin Wall, a conspicuous acknowledgement of the serious problems facing the regime, was considered by the East German leaders to be a necessary prerequisite for the economic recovery of East Germany and the strengthening of SED control. Despite the wave of indignation which the building of the wall evoked in the West, it enabled the regime to halt the refugee flow, restore discipline, and to turn its full attention to necessary changes in economic policy. In 1962 Ulbricht began to abandon the "ideological" approach to economics, dropping the Seven Year Plan and quietly substituting more realistic annual plans. At the same time he instituted governmental organizational and policy changes designed to provide a more rational approach to East Germany's basic economic problems. This emphasis on a more practical approach to economic problems was reflected at the Sixth Party Congress, held in January 1963, where younger, technically trained party functionaries were raised into higher leadership positions.

The party's preoccupation with economic problems was further indicated by the decision of the Party Congress, implemented in February 1963, to reorganize the party according to the "production principle." Imitating changes previously initiated in the Soviet Communist Party by Khrushchev, the SED consolidated its control over the economy by creating separate party bureaus for the agricultural and industrial branches of the economy.

The changes were mirrored in a reorganization of the lower level SED organization. While leaving some measure of autonomy to the Associations of People-owned Industries (VVBs), the SED sought to insure its control over the economy at the lower levels by replacing the former districts and county-level executive bureaus by five-man secretariats. The new secretariats consisted of a first secretary and secretaries for agriculture, industry, agitation, and ideology. These structural changes were accompanied in many cases by personnel changes which enabled the SED to replace ineffective functionaries with younger and more technically competent men.

Despite Ulbricht's claim, the 1963 structural reorganization caused almost as many problems for the party as it solved. Although much time and effort were expended to implement the prescribed changes, the SED alter quietly followed the lead of Khrushchev's successors, who began in late 1964 to abandon the "production principle" and to reestablish the "territorial principle" as the governing concept in the party's organization. The SED, however,

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110019-3