The Washington herald., 1922-06-05
DECLARES CAPITAL
NEEDEDTORESTORE
TRADE WITH RUSSIA
Commerce Staten en- t
Says Soviet Blockade
Hampers Foreigners.
MONOPOLY IS FOUND
British. Disappointed in Re.
suits Of Treaty With
Bolsheviks.

The really important problem
eenfrontinE American business men
with respect TO Russia is not that
Of trade but that of investment"
.Az. q statement from the Depart
ment OF Commerce. Without a
large investment Of foreign capital
As . means Of restoring produc-
zion. the prospects are that, at least
for some years to- come, there will
be even less opportunity to sell
goods to Russia than in 1871, for
with the exhaustion of the gold re-
serve, her means of payment will
shrink to a minimum.
The feasibility of investing capt.
tai in Russia depends essentially on
the policy Of the BolshevIk govern
ment and on the general interna,
situation. and not In any important
degree upon action OF foreign gov
ernments.
There seems to be some misun-
derstanding as to the practical char
aeter Of the trade agreements made
with Russia by foreign govern
ments- There is nothing IN the
trade treaties between Russia and
England. Germany. Italy or other
countries which permits or estao-
lishes trade with private indivtd-
usls in Russia. In substance. all
he treaties really provide Is author
~ for the Russian government IT.
elf to establish buying agencies In
1e several countries. To be sure.
gese treaties nominally permitted
tizens Of the countries making
EN-. under certain restrictions. to
Iter Russia. but when they ar
lved there they found that trade
was a government monopoly. that
they could not sell to private con-
Germs and that. in fact. the govern
nent usually referred them back to
Its buying agencies in their own
countries.
Rsssiar Imports small.
In view of the fact that the total
present imports of Soviet Russia
are small. the interest OF foreign
concerns in selling goods there
would necessarily lie chiefly in the
hope of laying foundations for the
future. No such hope can be en-
tertsined SO long as the Soviet gov
ernment monopolizes import trace.
Under that practice there can be
no establishment OF business con-
neGtions. no building up of trade
reputation.
Uninformed persons often speak
Of the so-csllsd blockade main
tainsd against Russia. As a matter
Of fact. for two years time now no
such blockade has existed The real
blockade on trade. not only with US,
but with all the world. is that ma in
tanned by the Soviet government IT.
self BY its monopoly of commerce.
il has hampered the export even of
the small quantities of goods which
we're available and has discouraged
the production of more goods.
Compare FavorabIy.
As matter of fact. despite the
absence of a trade agreement, our
exports to Russia compare verY IA
vorably with those of our two prin-
cipsl competitors Great Britain
and Germany. For example: In 1918
British exports to the Russian En-
pire amounted to S135.O00,OO0: in
1921 to $50. 500. 900. or only one
fourth as much. The United States
rsver had a large share in Russian
trade before the war. Our exports
to that country in 1918 were s2T,-
600. Oe0 In 1921 they were over two
thirds as much sl9. rs 1000 - AMI
most Of this represented sale of
goods, though q part consisted of
relief supplies. which. during the
present year have become much
larger. A considerable fraction of
British shipments to Soviet Russia
last year consisted of re-exported
foodstufs. and these. II they did not
come directly from the United
, -States. virtually created a demand
tor the equivalent quantity from
isis country.
THE British have been grievously
disappointed in the results of their
trade treaty. Much had been made
Of the enormous needs of the huge
Russian population so long deprived
Of goods. 1t was forgotten that need
for goods does not constitute de-
nand for goods. Demand implies