The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1928-10-17
KEEPING UP
With
THE NE WIS
BY LUDWELL DENNY


" let Russia has broken through
the American credit blockade after
eleven years.
The General Electric COMPANY
recognizes Russia, regardless of the
United States government. And
where Owen D. Young has led.
the state department sometimes
has been known to follow.
That is the significance Of the
Joint announcement t by General
Electric and the Amtorg Trading
corporation of provisional 1l-vear
contract for electrical machinery
involving possible long-term credits
to Russia of $26,00O,OOO.
Russia needs diplomatic recogni-
ton. But she needs credit much
more. Indeed the chief disadvant-
age Of nonrecognition has been
that it operated to prevent Rus
STA getting long-term credits in
this country.
Thus the General Electric
Amatorg deal, in addition to Great
ting stronger economic incentive
for United States diplomatic recog-
milton, makes such recognition rela-
lively less imperative to Moscow.
Furthermore, if owen D. Young,
and one of the largest corporations
in the world are willing to trust the
Russian government, may not other
American banks and industrialists
be inclined to follow?
Nominally, there has been no in
dustrial credit embargo here against
the Soviets, but there has been one
in fact. The state department, with
all its enmity and distrust of Rus
STA, could not prevent citizens of a
free country from trading with Mos
COW, though the department did re-
quest bankers to extend no financial
loans.
Thus the departments ban, while
limited nominally to financial loans,
operated in effect to discourage in
dustrial credits. Apart from this
pressure, American firms naturally
have been unwilling to do a large
credit business with Russia so long
as diplomatic nonrecognition pre-
vented the regularization and legal
ization Of commercial relations upon
which international trade and credit
largely depend for protection.
& 4 4
THIS did not prevent Russian
h American trade, but it materi-
ally restricted the ahnormally large
orders which Moscow wanted to
place with American firms for giant
naturalization.
For the last five years Russia has
been the largest single buyer on the
American Cotton Exchange, and has
placed many orders for agricultural
and industrial machinery--but al
ways under the tight restriction Of
short term credits. The Chase Ma
tional Bank of New York and others
nave floated this trade usually with
a six months limit and never with
a credit longer than two years.
Hence the Importance of Cen
eral Electric, with all its domestic
and international business prestige.
scorning the credit and diplomatic
blockade and reckoning to outlawed
Russia with provisional five-year
industrial credit Of $26,000,00O
But even this does not tell the
whole story of Russia's rapid COM
mercial success in the United States.
According to the figures of Amtorg,
the chief Soviet trading organization
here, total Russian American trade
turnover for the fiscal year 1929,
just ended was more than
$12O,000,0OO
That was 80 per cent increase over
the preceding year. 1t was a 300
per cent increase over the czarist
year, 1914.
Moscows third American success
is its long term contracts to supply
about one-fourth of its total oil out
put to Vacuum Oil and Standard OF
New York. From this transaction
Moscow gets $10,0O0,0OO a year and
is able tn laugh at efforts of Stand
ard of New Jersey and the British
trusts under Sir Henri Deterding to
drive Russian oil from the world
markets.
n
THE joint statement yesterday
Il on the electrical credit follows:
international General Electric
Company of New York and Amtorg
Trading Corporation of New York
announced today that they signed
under date of Oct. 9, a contract
covering supply of electrical APP
paratus for export to the u. S. S. r.
The contract provides for purchase
on the part of Amtorg of not less
than $5,000,000 or more than Sl0,-
100000 worth Of apparatus and ma
terial during the first two years.
Payment of rs per cent is re-
quired before shipment of material
and the balance is to be covered
by trade acceptances falling due
within a period of five years from
date of shipment. Provision is
made, upon satisfactory completion
of purchases during the first two
years, for continuation of the con-
tract for further period of four
years involving purchases Of not less