Omaha daily bee., 1921-04-18
Economic
Vacuum In
Red Russia
Hughes Gives Facts in Re.
ply to Letter From Samuel
Compers Asking About
Trade Relations.
SoMets Unable to Pay

BY The Associated Press.
Washington, April II. - Secretary
Hughes. writing to Samuel Gompers,
who asked for statement of "the
facts" regarding Russia, indicates
definitely that there Is no prospect
of a resumption Of relations with the
United States while the soviet politi-
cal and economic system remains.
The letter replies to various state
mcnts characterized as propaganda
which contend resumption of rela-
tions with the soviets would open a
great current of trade of advantage
to the United States and that large
shipments of Russian gold have been
made to other countries in payment
for goods.
Soviet Russia, the secretary de-
clares, is a Gigantic economic vac
uum" and he adds that mo evidence
exists that the unfortunate situation
is likely 70 be alleviated so long as
the present system continues"
Taking up the charge that the
scarcity of goods in Russia is due
to the blockade removed last July 8
and the statement that the demand
for. manufactured goods i'll Russia is
so great and the soviet purchasing
power so vast that it is almost I'M
possible to determine the capacity OF
the Russian market to imports, Sec
retary Hughes wrote:
Purchasing Power Small.
Though there is almost no limit
TO the commodities needed by Rus
sia, the purchasing power Of that
country is at a minimum and the de-
mand must remain unsatished. The
attitude and action of the authorities
of Russia have tended to undermine
It's political and economic relations
with other countries. The Russian
people are unable to obtain credit
and are compelled to be deprived OF
commodities Immediately necessary.
1t should not be overlooked that
there has been steady degeneration
in even those industries in soviet
Russia not dependent on imports
nor in which has there been any
shortage Of labor.
NSStiINuUHS OH dlCSt ttddC Will
Russia were removed by the United
States July &, 1920 Conclusion Of
treaties OF peace with the Baltic
states enabled Russia to enter upon
trade with Europe and the United
States. Both American and Euro.
pean goods have been sold to Rus
sia, but the volume Of trade has
been unimportant, due to the il-..I
ability Of Russia TO pay.
Upable to Pay Cash.
Z at is true agents purporting to be
representatives of the so-called boil
shevist comnaissariat Of foreign
trade have placed immense orders
ior the purchase of goods in the
United States, Europe and Asia. 1t
is estimated perhaps Sc, 500, 600, 900
worth of orders have been booked.
But shipments have been made only
in small volume because the soviet
agents were unable either to pay
cash or obtain credit"
In reality, the secretary says,
transfers OF Russian gold to other
countries have been small and at the
nest liberal estimates the soviets
have not more than $l75,000 GOO gold.
Even immediate expenditure Of the
whole amount in the United States,
he says. would have no lasting effect
on American trade or industry and
it might take away the scant hope
left Of sound reorganization of the
Russian system of currency and
finance"
There have been. since December
IS, Secretary Hughes says, no re-
strictions on financial transactions
between the United States>and Rus
sia although there is no assurance
that the mint or the reserve banks
will accept Russian gold.
Facts Relate Statements.
The facts" as to supplies in Rus
sia available for export he wrote,
Completely refute" statements that
if the United States recognized the
soviets, Russia Immediately would
export lumber, flax, hemp, fur and
other commodities. "The facts" he
says, show Russia does not have for
export commodities which might be
made the basis Of immediately pro-
ftable trade with the United States
and he adds that the Russian trans
portation system is demoralized. He
quotes an official soviet organ to
show lumber production in 1920 was
one-hfth of the prewar level. A table
shows the output of eight principal
exporting commodities at from II to
So per cent of what was expected.
Furthermore he points out, before
the war American trade with Rus
sia constituted only | $40 per cent
of ali the foreign trade of the United
States, being in the year ending June
so. 1918. SIS, 100000 for both exports
and imports, while for 1920, it was
$l3,O0,0 600 and practically all of that
was with territories free of soviet
domination.
1t is unquestionably desirable" he
wrote, shat intimate and mutually
profitable commercial relations be
established between the United
States and Russia and it is the sin
cere hope Of this government that
there may be readjustments in Rus
sia which will make it possible for,
that country to resume its proper
place in the economic life o5 the
world