Evening star., 1924-08-21
Article XVII.

Aftlcte Atll.
A number of foreign firms and
business men have embarked on busi-
ness ventures in Russia, attracted by
the invitations to foreign capital
from the bolshevik, anti-capitaIistic
government, and by their own ex-
pectations of large profits to be real
lied in the land of immeasurable
resources" as -bolshevik spellbinders
call 1t. Almost without exception,
their experiences have been so highly
disappointing, their calculations of
costs and profits so upset by official
manipulations and labor troubles,
that they have either abandoned their
concessions or are trying to save
what they can from the wreck before
Withdrawing.
The committee on concessions. the
governmental organization created
to examine and pass upon foreign
applications for consessions has had,
SO far as I have heard, only one
application before it during my stay
in Russia, the experiences Of other
concession holders having scared off
all other applicants.
The only two outside interests
which, to my knowledge, are at all
satisfied with their experiences with
Russian concessions are the Krupps.
who, with their British hackers, hold
an agricultural concession in south
ern Russia, and the Danish Great
Northern Telegraph Cable Co., who
accept business for their cables land
ing in Russia
The troubles wi ich the others have
encountered may be grouped under
three principal heads-arbitrary tax
alton, official control of courts and
legal procedure and perpetual labor
troubles, together with individual
snags for each individual venture.
No matter how satisfactory may seem
the terms of a concession, bolshevism,
which, be it remembered, is avowedly
the deadly foe of capital and the
bourgeois investor and entrepreneur,
is able and does by means rob it
of it's advantages.
The Case Of Two Americans
Two Pacific Coast Americans. who
had built up a profitable trading busi-
ness along the Kamchatkan and ST.
berian coast during the lifetime of
the Far Eastern Republic, came to
Moscow several months ago to
straighten out relations with the new
regime directed from Moscow and
make arrangements to continue oper-
ations. They encountered only pro-
crastination and extortion from the
central authorities; and while they
were here received a long series of
kilograms about new taxes, fees fines
and penalties, which were being levied
without rhyme or reason on their
local representatives A final wire
that new fees and penalties amount
ing to a quarter Of million dollars,
had been assessed against one of
their trading posts sent them flying
home from MOSCOW, sadder. but wiser.
The Westinghouse interests have
an airbrake factory at Yaroslavl,
which they have been operating un-
der q conc ssion to make equipment
for the rundown Russian railways.
Their services were welcome, but
only so long as they were indis-
pensable. This year the bolsheviks
got an airbrake plant Of their own
in operation, pirating the foreign
patents, and took the 1924 contracts
away from the foreign operated plant.
The Westinghouse people sought con-
tracts to keep the plant running in
Poland, Esthonia, Latvia and other
outside countries, but operating costs
were too high.
They kept running for several
months without orders to keep their
men employed. At bolshevik sugges-
tion an attempt was made to induce
the home company to put up a half
uOlldTS 10 pay wages
at the unproductive plant; and when
the company refused to throw more
good money after bad, there was a
torrent Of abuse from the workmen's
committee and the bolshevik papers
against the unjust Americans"
|. Couldn't Get Profits Ont.
The Otto Wolff concern. one Of the
great German metallurgical syndi-
Gates, with Dutch and British capital
behind 1t, secured most attractive
looking concession to do an export
and import business in Russia, oper-
ating through one Of the bolshevfk
type Of mixed companies, with the
Russian government as an equal
partner. Up to 40 per cent net profits
were to be divided equally between
the partners; above that the govern
ment got a larger share; and for
time the Russian authorities allowed
and melted the company to charge
such prices on imports into Russia
that the 40-per-cent limit was largely
exceeded. When, however, the for
eign partner tried to get its pay for
materials and profits out Of bolshevia
through exported commodities, snags
were encountered right away. LII
censes could not be obtained; the
foreign trade monopoly ignored the
privileges of the foreign partner, and
the Wolf1 interests duly enlightened
ON The dangers Of doing business with
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