The New York herald., 1921-02-12
RUSSIA DENUDED
AND HAS NOTHING
f. LEFT FOR EXPORT
Trade Adviser of State De-
partment Calls 1t Eco
nOmic Vacuum
PARALYZED BY SOVIETS
Peasants Producing Just
Enough for Own Needs,
While Cities Starve.
NO HOPE FROM 'REDS'
Men Who Try to Engage in
Private Business Liable to
Death Sentence.
NO HOPE FROM 'REDS'
Special Despatch to THE New YORK HERALD
New York Herald Bureau,


New York Herald Bureau,
Washington, ID. g., Feb. ii. !
Prospects are not favorable for eX-
tensive Russian trade in the near
future because Lenine ard Trotzky
have made that nation a gigantic
economic vacuum with virtually
nothing to export. A. w. Kliefoth,
foreign trade adviser of the State De-
partment, told the House Foreign AT
fairs Committee in presenting official
reports on conditions under the Boil
sheviki
THE devastation of industry in Rus
sia is so terrific the economic poverty
of the country is SO complete, the peo-
ple are so hungry and the demand for
commodities so great that at present
Russia represents gigantic economic
vacuum with no prospects of allevia-
tion under present political and eco
nomie conditions" said Mr.. Kliefoth.
Trade with Russia is highly de-
srable for the United States as we'll
as for most of the world. but at the
present time it cannot be established
in any appreciable degree because the
industries and consequent purchasing
power of the Russian people have col
lapsed.'
Mr.. Kliefoth said the United States is
now prohibiting trade with Russia only
TO the extent of war supplies, and that
there is no legal restriction on the ply
sioal importation of Russian gold into
this country, although no assurances can
be given that the gold could be disposed
Of in Federal reserve banks or the Mint.
No Private Business Left.
A vivid picture of the terrible condi-
tions in Russia was drawn by Mr.. Klie-
10th, who stated that future possibilities
of American trade in Russia would PROB
ably be impaired should this Govern
ment deal with the Soviets
1T can be said categorically," he said,
that inasmuch as individual trading is
considered criminal by the Soviets, all
private individuals caught trading are
brought before the Extraordinary Conn
mission and are liable to execution that
an private goods are considered contra
band. and that all industries have been
nationalized and largely ruined there is
at present no positive business in Russia
THE communistic management has re-
erty and inanition.
''With reference to the amounts of
commodities now on hand and being pro-
duced In Russia. it Is evident that after
Fix years of war. during which normal
industry ceased and all accumulated
stocks were consumed. followed by three
wears of total collapse OF industry under
the present authorities of Russia. there
are now no commodities on hand for eX-
s.l.
spare, or which are sufficient in amount
TO effect any trade condition between
the United States and Russia.
ITO illustrate: Grain, which was the
principal commodity of export, was
largely produced on tho large estates
which have now been divided. the I'M
plements destroyed and the cattle con-
sumed. There is now famine not only
i'm the cities but In the villages. The
peasants are producing the minimum
supply OF grain for their own immediate
needs. as there is no economic reason
WHY they should produce surplus stocks.
Forest Industry Paralyxed.
"The second commodity for export is
timber and forest stocks. Production of
timber is contingent on two factors !:
one labor. and two. transportation.
Labor. in turn. is dependent upon food
Stl1tE. DuI inc Ialllne III lle lOItHN
regions where foodstutfs cannot be pro-
duccd is greater than in other parts OF
Russia Timber moreover. is more
bulky for transport than grain. and, in
asmuch as grain is not available or
cannot obtain means OF transportation.
II available. we cannot expect exports
OF timber until after the export of grain
is restored.
"The third articles OF Importance as
exports are hides and skins. IL is well
known that the supply Of cattle was
largely consumed as food during the
war period. The peasant, moreover. is
incapable of conserving the skins and
the small stocks accumulated here and
there have decayed.
FLAX. which Is the next in Importance.
was actively cultivated during the war
and extensively exported Ihis business
was mainly controlled by the coopera-
tives. which succeeded in reaching tho
most distant sources of supply and ex-
ported the available stocks
"Furs. ranking next in Importance.
were similarly exported by the coopera-
tives during the war. However. at the
commencement of the civil war the trap
pcrs possessing firearms were prose-
cuted This has crippled the fur indus
try almost completely.
MUST Dcni WIN SoNiets.
"'rhe last article of importance is
platinum. During the war the Allies
thoroughly combed Russia for every
scrap Of platinum. and no stocks are
now known TO exist The platinum
mining industry is a most intricate and
delicate process. which under the catas-
trophic spoliation of industry in Russia
is now almost non-existcnt
THE greatness Of future Russian
trade is undisputed. and the share OBJ
tainabo by the United States, from a
selfish commercial point of view. de-
ponds much upon our future relations
with tho future Russian Government.
The upbuilding OF the industries OF Rus
sia will not only be a great humanitar-
ian work. but will render patriotic
service TO the United states.
by the Soviet decree of March 20.
1919, the Consumers Cooperative So
cieties and their unions were converted
from a free independent cooperative or
SANITATION with a private juridical sta
tue into n compulsory state institution.
and forming a part Of the machinery of
the Soviet authority In Russia All for
eign trade In Russia Is an absolute
monopoly OF the Soviet authorities"