Evening star., 1930-12-07


from importers and exporters engaged
In the Russian trade some very bitter
comments upon the Governments pol
icy in this matter. These comments
have in turn stimulated much discus
sion in financial and industrial circles
Of the ultimate worth of Russian trade,
bringing to light powerful arguments,
seemingly unanswerable both for and
against Americas venture into the So
Wet Russian market.
Within a radius Of a few hundred
yards of Trinity Church it is possible to
find heads of our greatest banking
houses and industrial corporations who
praise the Governments action in tax
ing step likely to discourage our grow
ing trade with Russia as a timely curb
upon traffic with the enemy and upon
dangerous speculation which might, as
credits to the Soviet Union mount up,
some day let us in, without warning,
for staggering losses
Within the same radius one can find
equally high and SagaciouS authorities
who deeply deplore the TreaSuryS inter-
ference in a rapidly growing and in
creaSingly profitable trade, which they
insist Is on a sound business footing
and which they are confident will go
on growing, no matter what the changes
in Russia'S political complexion may be.
Effects on Depression Pointed Out.
The most powerful argument against
what those involved in Russian trade
consider tactless affront to the Soviet
Union is that if it haltS Russian i'm
ports and calls forth reprisals as the
European embargoeS have done, 1t will
have an Immediately depressing effect
upon manufacturing and employment
out Of proportion to the real Importance
Of the trade
We have taken great pains to impress
upon our induStrialists that the exist
ing depression Is traceable in part to
loss Of confidence in this country and
In part to falling on Of our foreign
trade because of turmoil in Asia, re-
duced purchasing power in Europe and
political changes In Latin America.
Our business men have been per-
Buaded to take a lively interest in for
eign commerce, so great deal of conf
dence and courage could be restored
If they could be shown that China or
Russia or the Argentine were about to
start spending heavily and relieve us
OF large consignments Of surplus manu-
features. There is bound to be
marked loss of courage, reflected in the
employment market, If the watchful
and now timid industrialist notes that
any considerable item is about to be
Topped of of our foreign trade
Investors in Russia like the Ford COM
pan1es and the General Electric Co
can undoubtedly take care Of them
selves and would not be greatly dis
turbed by the total loss of credits ex-
tended, but scores of smaller firms, fol-
lowing the lead of the big ones, have
extended credits averaging about 800
600, and these would abruptly curtail
production and throw men in the streets
II they lost their investments. The
actual losses would be relatively small.
but the demoralizing effect would at
this time, when industry is sensitive to
every little shock, be disproportionately
serious. The Treasury's action may, in
snort, prove to be very Ill timed blow
at recovering confidence in this country.
Chance for o. s. Technical Monopoly.
second strong argument for nurs-
ing along such export trade as we have
with Russia Is that it is serving to
introduce into that country huge and
expensive plants, and with them Ameri-
can technique, into which, if they are
allowed TO grow as they are being es-
tabnshed. the Russian purchasers can
introduce neither European machines
nor European technique without alter
auons almost equivalent in cost to COM
plete replacement.
Each such plant established creates
lasting demand for American ma
oAAA AAdNAAAAC Pol u, anu II LIlG
trade we're allowed to persist for some
years further the greater part of Rus
s1as new industrial equipment would
be so American in character that
neither the Soviet government nor its
successors, If the MARKHAM experiment
collapsed. could afford to jeopardize its
trade relations with this country by de-
nodnclng It's obligations to any Ameri-
can creditor
Working on this theory. several Of our
greatest corporations, after toying gin
gerly with Russian trade for a number
OF years, risking credits TO the extent of
the estimated profits only have ven
tured upon sales on long-term credits
TO the value Of many millions, and are
confident that the Soviet government
not only will not but cannot repudiate
its obligations.
Yet there are other equally powerful
corporations which, after years OF dick
ering and some profitable transactions
have pulled out Of Russia altogether
and now announce that they are out for
good because they are convinced that
there can be no such thing as q safe
investment in Russia. Their argument
70 show how fundamentally unSound ali
traffic with Socialist state Of doubtful
staying power must be, Is worth sum-
narizing.
Under the MARKHAM system the gov
eminent alone engages in foreign trade
and its foreign agents, such as the
Amtorg Corporation in this country, are
as much government instruments as oul
diplomatic and consular establishments
abroad. The Amtorg's credit Is there
fore just as good or as bad as thG
Soviet governments credit. It's re-
sources for foreign trade are Russia:
resources. and If Russia goes into bank
ruptcy the An1torg and all the Soviet's
similar trading agencies Immediately gc
into bankruptcy with it.
Resources Called Unstable.
Now what are Russia's trading re-
sources? Raw materials and food prod.
ucts only. With the exception O!
matches Russia has no surplus and L
unlikely for years to have a surplus o,
buys abroad she must pay for out o
the surplus products of her mines, for
ests, fisheries and fields.
Under existing conditions It 4
argued, no one in Russia, much les.
any one abroad, can prophesy for NOR
than six months in advance what Rus
. sia's resources for foreign trade ar
likely to be. A crop failure, an anima
pesttlence, civil war, or foreign wa
might have disastrous effect upon tn
Soviet's whole foreign trade budget
Whatever the manipulators OF Rus
saa'S credits in Moscow may know
about the total Of their pledges abroad
40 one outside of Russia has the slight
est idea Of their commitments, nor an
way of finding out about them. An In
tensive study of conditions on the spo
might persuade an American inveSto
that, given a good crop year. no foreigl
war, and a continued willingness on tn
part Of the Russian people to do witt
as little food and clothing and as poo
housing as they now get. Russia woult