The New York herald., 1921-04-18
HUGHES DECLARES
RUSSIA GIGANTIC
ECONOMIC VACUUM
Gompers Asked Him for
Facts About Soviet Trade
and Gets Them.
NO CREDIT OBTAINABLE
No Prospect of Resuming
Relations While Present
System Remains.
CAN DEAL FREELY NOW
Country Has Few Export Goods
and Could Not Move
Them if 1t Had.
JAN DEAL FREELY NOW


WASHINGTON, April 17.-Secretary
Hughes, writing to Samuel Gompers,
president Of the American Federation
of Labor, who asked for a statement
of the facts regarding Russia, indi-
Gates definitely that there is no pros
pect of a resumption of relations with
the United States while the Soviet
political and economic system remains
The letter of the Secretary of State
makes direct reply to various state
rnents, characterized as propaganda,
which contend that resumption of re-
lations, trade or political. with the
Soviets would open a great current Of
trade of advantage to the United
States and that large shipments OF
Russian gold have already been made
TO other countries in payment for
goods.
Soviet Russia Secretary Hughes de-
clares, Is gigantic economic vacuum
and he adds that mo evidence exists
that the unfortunate situation Is likely
to be alleviated so long as the present
political and economic system con,
tinues.''
Taking up specifically the charge that
the scarcity OF goods in Russia is due
to the blockade which was removed July
s, 1920. and the statement that the de-
mand for manufactured goods in Rus
sia is SO great and the purchasing power
OF the Soviets SO vast that It is almost
impossible to determine the capacity OF
the Russian market to import. Secre-
tary Hughes wrote:
Parcb nsfnx Power at Minimum.
Though there is almost no limit to
the amount and variety OF commodities
urgently needed by Russia, the purchas-
ing power OF that country is now at a
minimum and the demand must conse-
quently remain unsatished. The atti-
tude and action OF the present authorl-
ties Of Russia have tended to undermine
its political and economic relations with
other countries. The Russian people are
unable to obtain credit which might
otherwise be based on the vast potential
wealth of Russia and are compelled to
be deprived of commodities Immediately
necessary for consumption. raw ma
terials and permanent productive equip
ment. II should not be overlooked that
there has been a steady degeneration In
even those industries IN Soviet Russia
that were not dependent upon imports Of
either raw material or partly finished
- A.
any shortage Of labor. There can be no
relation of the failure OF all these in
dustries to blockades or civil war, for
most of them require no imports. and
the men mobilized since the Soviet revo-
luton were far less in number than be-
fore that event.
Restrictions on direct trade with
Russia were removed by the United
States on July 8, 1920. The conclusion
of treaties of peace with the Baltic
States enabled Russia freely to enter
upon trade with Europe and the United
States. Both American and European
goods have been sold to Russia but the
volume of trade has been unimportant.
due to the inability of Russia TO pay
for imports.
IN is true that agents purporting to
be representatives of the so-ca Sol-
shevist Commissariat OF Foreif. -ade
have placed immense orders for t.e pur-
chase OF goods in the United States.
Europe and Asia. II is estimated that
perhaps 1900, 10000 wortl, OF orders
have been booked. but shipments as a
result OF these orders have been made
only in small volume. because the Soviet
agents were unable either 10 pay cash
or to obtain credit 20 as to insure the
delivery Of tho goods ordered
No Exports Ready.
In reality Secretary Hughes says,
transfers OF Russian gold to other coun-
tries have been small and at the most
liberal estimates the Sovtets have not
more than N75. .0o0.000 Of gold, in their pos
session.
There have been since December Is.
1890, Secretary Hughes informs Mr..
Gompers, no restrictions on financial
transactions between the United States
and Russia. although there is no as
surancs that the Mint or the Reserve
banks will accept Russian gold, a.
public institutions must be assured
that title Is not open TO question.
''The facts In regard to supplies IN
Russia available for export. Mr..
Hughes wrote. completely refute"
statements that II the United states rec
ognized the Soviets Russia Immediately
would export large quantities OF ium-
ber. flax, hemp, fur and other COM
modities. The facts" he says. show
that Russia does not have on hand
for export commodities which might
be made basis OF Immediately profit
able trade with the United States. and
he adds that the Russian transporta-
tion system is SO demoralized that It
could not move them II they existed.
ut Is unquestionabIy desirable" wrote
Mr. Hughes TO Mr.. Gompcrs. that in
innate and mutually profitable COM
mercial relations on an extensive scale
be established between the United
states and Russia, and Il is the sin
cere hope Of this Government that there
may be readjustmcnts in Russia which
VIII make u possible for tnat country
to resume It's ptoper place in the eco
nonic life OF the world"
SIZE Of the velvet e,es and lyrics body--