Arizona republican., 1921-04-18
HUGHES WRITES GOMPERS THERE IS NO PROSPECT FOR TRADE WITH RUSSIA WHILE S0v|ETS CONTROL
Secretary of State Says Reports of Russian Gold ing for American Made Goods Propaganda; Russia Anxious for American Goods But Lacks Gold Reserve With Which to Make Necessary Payment
IRepubIiean A. p. Leased wirel

1omperS, who asked for a statement Of the facts regarding Russia. in dicates definitely that there is no prospect of a resumption of rela- tions with the United States while the soviet political and economic sys- tenn remains.
 The letter replies to various state ments 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- clared. lis a gigantic economic vacuum" and he adds that mo evi- dence exists that the unfortunate sit uation is likely to be alIeviated- so long as the present system con tinues."
 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 in Russia is so great and the soviet purchasing power so vast that it is almost i'm possible to determine the capacitv of the Russian market to imports. Sec retary Hughes wrote:
 Purchasing Power Nil
 Though there is almost no limit to the commodities needed by Rus sia. the purchasing power Of that country is at minimum and the de- mand must remain unsatisfied.
 The attitude and action Of .he 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- de- prived of commodities immediately necessary. It should not be overlooked that there has been a steady degeneration in even those in- dustries in soviet Russia not depen- dent on imports nor in which there has been no shortage of labor.
 Restrictions on direct trade with Russia were removed by the United States July 8, 1920. Conclusion cf 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 Russia but the volume of trade has been un- important, due to the inability of Russia 70 pay.
 'It is true agents purporting to be representatives of the so-caiIed boi- shevist commissariat of foreign trade have placed immense orders for the purchase of goods in the United { States. Europe and Asia. It is esti- mated perhaps six and one-half bil- lion dollars worth of orders have been booked. But shipments have been made only in small volume be- cause 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 most liberal estimates the soviets have not more than s175,o0o. 900 gold. Even immediate expenditures of the whole amount in the United States, he says, would have no lasting effect on American trade or industry and 1t might take away the scant hope left of sound reorganization of the Russian system of currency and 1 finance"
 There have been since December l IS. Secretary Hughes says, no re- striction on financial transactions be- tween the United States and Russia, althought there Is no assurance that
 the mint or the reserve banks will accept Russian gold.
 "The facts,' as to supplies in Rus | sia available for export. he wrote. completely refute" statements that 1 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 immediate profit able trade with the United States and ! he adds that the Russian transporta-
 tion system is demoraliZed. He quotes an official soviet organ to show lumber production in 1920 was one fifth of the pre-war level. A table shows the output of eight prin- i cipal exporting commodities at from
 F to 5s per cent of what was ex- pected.
 .'Furthermore~ he points out be- | fore the war American trade with Russia constituted only one and three tenths per cent of all the for 1 eign trade of the United States.
 being in the year ending June 90, 1913. S55. .o00. 900 for both exports and | imports while for 1920 it was SIS. | 100000 and practically all of that
 was with territories free of soviet
 domination.
 Tt is unquestionably desirable"
 he wrote. that intimate and mutu
 ally 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 establishments in Rus
 sia which will make it possible for that country to resume its proper place in the economic life of the world"