Evening star., 1922-06-12
HOOVERSEESFUNDS
A'SMA|N NEED.
Restored Production by For.
eign Capital Only Means
of Creating Trade.

The really important problem now
, confronting American business men
with respect to Russia is not that of
trade, but of investment, Secretary
Hoover declared last night. in a state
ment clearly summing up the entire
Russian situation. without a large
investment of foreign capital as
means of restoring production" Mr..
Hoover said. Russia will not be in
position to buy goods from outside
countries for many years to come.
There seems to be some misunder-
standing as to the practical character
OF trade agreements made with Rus
sla by foreign governments. There is
nothing in the trade treaties between
Russian and England, Germany, Italy
or other countries, which permits or
! establishes trade with private indi-
viduals in Russia. In substance, all
that the treaties really provide is au-
| thority for the Russian government
itself to establish buying agencies In
the several countries.
Total Imports Small.
I'm view of the fact that the total
present imports of soviet Russia are
small, the interest of foreign con-
Germs in selling goods there would
| necessarily lie chiefly in the hope of
laying foundations for the future. No
such hope can be entertained SO long
as the soviet government monopolizes
import trade. Under that practice
| there can pc no establishment of
business connections, no building up
of trade reputation.
Within the past few months CO.
operative institutions. which had
been converted into purely govern
ment organs, have been restored to
some measure of independence and
engage in foreign trade at the same
offices as the soviet government.
Still more recently importation of
some agricultural implements has
been permitted to private Russian in
dividuals. The great bulk of for
hands of government organs.
"Uninformed persons often speak
of the so-called blockade maintained
against Russia. AS matter of fact.
for two years now no such blockade
has existed. The real blockade on
trade. not only with us, but with all
the world, is that maintained by the
soviet government itself. By its
monopoly of commerce it has hamp-
cred the export even of the small
quantities of goods which were avail
able and has discouraged the produc-
ton of more goods. Our govern
ment puts no obstacles whatever
upon selling to Russia. One result
has been that even in countries hav-
ing trade agreements no merchants
have been able to establish them
selves in Russia or to undertake
manufacturing enterprises.
Little Prospect for Exporting.
There is little prospect that Rus
sia will have any more to export in
1922 than she had in 1921. Meantime,
the gold reserve is approaching eX-
haustion and with it is disappearing
what might have furnished start
toward re-establishing workable
currency. The paper money of Rus
sia is fastening to the ultimate ca
tastrophes of utter unacceptability
(ithin the country itself The recent
attempt of the bolshevik leaders to
restore something resembling indi-
vidualistic methods in the conduct of
industry, and particularly by pay
ment of wages in money instead of
communistic division of commod-
tiles in the form of rations to the
workers, has itself hastened the cur
rency debacle. There being a fun
damental shortage of foodstuffs and
other necessaries. wages paid in
money naturally cannot buy enough
Prices soar, and though wages are
multiplied by constant emissions, they
cannot catch up with 'galloping
prices" as a leading bolshevik jour
nal calls them. Prices in Moscow now
are doubling every month, which
means multiplying 1000 times in
year. A day ration of food cost. In
April. a million rubles.
AS matter of fact. despite the alb
sence of a trade agreement. our eX-
ports to Russia compare very ia
vorably with those of our two prin-
cipal competitors-Great Britain and
Germany.
Really Important Problem.
The really important problem con-
fronting American business men with
respect to Russia is not that of trade.
but that of investment. Without a
large investment of foreign capital as
a means of restoring production. the
prospects are that. at least for some
years to come. there will be even
less opportunity to sell goods to
Russia than in 1921, for with the eX
haustion of the gold reserve. her
means of payment will shrink to
minimum. The feasibility of investing
capital in Russia depends essentially
on the policy of the bolshevik govern
ment and on the general internal situa-
ton, and not in any important degree
upon action of foreign governments.