New-York tribune., 1921-03-22
Present Economic System
of Soviets Must Be Aban-
doned First and Produc-
ton of Goods Resumed
Gold Not Enough
For u. S. Business
Administration Expected
to Adopt Wilson Policy
of ofNon-Recognition N
From The Tribuns's washineton Bureau


WASHINGTON, March 81. - In the
first statement that has come from the
new Administration on the question of
trade with Russia, Herbert Hoover,
Secretary Of Commerce, outlined to-day
the stand that will undoubtedly be
taken by the State Department. AL
though. Mr.. Hoover said his discussion
was purely economic, it is known
that he has talked over the question
with President Harding and Secretary
of State Hughes.
The main points in Mr.. Hoover's
statement virtually dovetail with those
Of the policy of the Wilson Admins
tration and indicate that there is to
be no appreciable change in the course
Mr.. Harding will pursue. The two sub
stantial features of the policy of the
old regime were that there can be no
recognition or dealing with Bolshevik
Russia and that the United States can
not approve Of any attempt to partition
Russia.
Reds Have Nothing to Export
Under the present economic system
in Russia, said Mr.. Hoover, there can
be no production and consequently no
commodities for export.
Europe cannot recover it's economic
stability until Russia returns to pro-
duction," said Secretary Hoover. "Trad-
ing for this parcel Of gold would not
effect this remedy, nor would the goods
obtained by the Bolsheviki in return
for it restore their production. That
requires the abandonment of their
present economic system"
Mr.. Hoover's statement said:
"The question of trade with Russia
is far more political question than an
economic one so long as Russia is in
control of the Bolsheviki. Under their
economic system, no matter how much
they moderate II in; name, there can be
no real return to prod dhctio1 Iii Russia
and, therefore, Russia will have no
considerable commodities to export
and, consequently, no great ability ia
obtain imports.
Suffer From Famine at Home
Russia to-day worth consideration ex-
cept gold, platinum and jewelry in the
hands of the Bolshevik goveynm ent.
The people are starving, cold, under
clad. If they had any consunable
commodities they would have used
them long since.
mo better illustration of the de-
struction of production under the Boil
shevik system exists than in the case
OF flax. Pre-war Russia produced 500,-
600 tons of fax year, and herself
consumed 10000 tons The produc-
tion in 1920 was about 10000 tons, with
mills and hands at least capable Of Of
spinning 100000 tons and the popula-
tion underclad In any event, no CON
sequential export flax is available, nor
ever will be available under this econ
omic system.
"Nor can trade with Russia, under a
government that repudiates private
property, be based on credit. Thus
the whole question from trade point
of view develops into furnishing com
modities equal to the gold platinum
and jewelry, variously estimated from
100000, 600 to $200,O00,OO0, in the hands
of the Bolshevik government, and
after that has been expended there can
be little expectation of continued trade.
There has been no prohibition on trade
for long time, so far as exchange of
commodities is concerned Trade is
open through the Baltic states. and
Italy has been trading in the south.
The real blockade has been the failure
of the Russians to produce anything
except gold and platinum to trade
with.
Title to Gold Clouded
There has been but little trade for
gold because it's title has been called
into question by the French govern
ment and by threats of individual ac-
tions in the courts on the ground that
it is stolen or subject to foreign liens.
It is apparently the intention under the
British trade agreement to allow this
matter to be threshed out, so far as
England is concerned, in the British
courts. The terms Of the German
agreement in this particular are un-
known. If any one European nation
accepts the gold no doubt all of them
will.
Europe cannot recover its economic
stability until Russia returns to pro-
duction. Trading for this parcel Of
gold would not affect this remedy-nor
would the goods obtained by the Boil
sheviki III return for it restore their
production. That requires the aban-
donment of their present economic
system"