Evening star., 1930-12-07
BUSINESS HEADS DIVIDED
ON CURB OF SOVIET TRADE
Treasury Departments Bar on Convict
Goods Approved as FOrestalling
Greater Loss Later.

almost no cash business. It asks for
credits over a period Of 18 months and
frequently gets them. Much American
merchandise has been sold for 25 per
cent of the purchase price with the con-
tract; the balance due in three equal
eighteen months.
A local business man recently thought
he had made sale to Amtorg of $4,000
worth of goods and went to that insti-
tuition to close the deal. He was asked
to extend credit on the terms quoted
above; but instead of signing the con-
tract he seized his hat and boIted, con-
vinced that when the government of q
great nation asked for long-term credit
on so small q deal 1t was time to stand
clear.
Taking these considerations into ac-
count, the bankers and industrials who
have dabbled in Russian trade and have
withdrawn in alarm believe that, in
view of the instability of the present
government, the uncertainty of its abil-
ity to keep the Russian people at work
on their present rationS, and in view
of the Communists past contempt for
debts to the capitalist" small sales to
Russia at 80 days credit would be
pleasantly precarious CANDLES for those
who could afford it, but that the ex-
tension Of long credits for big sums by
those who cannot afford to lose their
stakes are reckless CANDLES.
From this point the conservatives
argue that it would probably be better
for American business If the Treasury's
much abused action in embarrassing
the Russian import trade were to cut
short the Russian trade at this juncture,
when no one is very deeply involved,
than to let Moscow go on eliciting heavy
American investments until, in some
such emergency as famine or civil
war, we should be suddenly faced with
the repudiation Of another huge Rus
sian debt.
These arguments do not move the
bankers who are consistently financing
credits to Russia. They admit their
validity. They admit that Russia's ex-
isting and future resources for foreign
trade are unknown and must remain
unknown. Fhey therefore admit cheer
fully that the long credits which they
are extending are gamble entailing
certain risks, but these risks they re-
fuse to believe are heavy. They express
the firm belief that Russia Is not buy
ing beyond her ability to pay, and con-
feSs to faith in her determination to
pay.
Russian Commerce Founded on Faith.
Equally sagacious men around the
corner admit that there has so far been
no Smirch upon the new RuSSia's credit,
and that credit business is profitable
for those who engage in it; but they
simply cannot cherish the same faith
in the Soviet Governments good inten-
tionS.
The further one goes in pursuit Of
authoritative opinions the clearer it be-
comes that the whole Russian commerce
Is founded upon faith, and that the in
dividual's attitude is shaped entirely by
his ability TO believe or diSbelieve in
Russia. About the character Of the
Treasury Departments action there is,
however, more unanAmity of opinion.
It Is generally considered arbitrary.
In Washington, apparently, the most
commonly held opinion Is that in the
export trade the Soviet government Is
an economic freebooter. Russia adver-
tises a huge sugar or grain surplus
abroad to demoraliZe European and
American markets, follows 1t by selling
short and then actually buys in COM
moditieS, as she bought sugar in Cuba,
when she has depressed the market.
Russian ships come out Of the Black
Sea loaded with produce consigned to
nowhere. They go from port to port,
peddling raw materials for which Rus
sia has paid nothing but underfed labor,
always selling below the lowest market
prices and always momentarily dislocat-
ing the local market.
Russia exports for four purposes,
namely, to get credits to pay for her
imports, to get gold for the security
"conscript labor" to finance the opera
tions Of the Third International in cap
italist countries and to throw capitalist
markets into confusion and embarrass
capitalist agriculture and industry.
Since the balance Of trade in this coun-
try Is against Russia to /, the only
lniquitous purpose that she could serve
mere would be the last mentioned-the
confusion OF markets by dumping.
The damage that Russia can con-
celvaoly DO in this way, say those in
volved In Russian trade, Is trifling when
balanced against the profits derived
from our exports. The damage done at
this time, when confidence is unduly
low and industry inordinately timid,
more than offsets any profits that may
accrue from the export trade when
realized, say those opposed to the traf-
nc. No one offers to produce any fig
ures to support his contentious on
either side.
Treasury Curb Called Arbitrary.
Nevertheless, 1t Is generally admitted
that the TreaSury's conditions imposed
upon the import trade have come too
suddenly and are too arbitrary. Rus
sia Is accused Of importing raw ma
terials produced through the use Of
convict labor, so the Treasury Depart
ment rules, without specific reference
to Russia, that when the department,
sitting in camera, decides that certain
goods coming from certain areas are
r,<l I.vn ,4oS- L.
give bond covering the value of the
cargo to land 1t, and then prove to the
departments satisfaction that his goods
were not produced by convicts.
II he fails the penalty Is confiscation
OF the cargo and a possible suit under
the bond. Against the department. S
pronouncement that certain goods from
certain areas are under suspicion and
must be proven free from taint, there
Is no appeal in any court. Those par
ticipating in the Russian trade express
the gloomy conviction that the Amtorg
Will interpret this action as o virtual
embargo on Russian imports and that
the Soviet government will take the
| hrst opportunity to retaliate, as in Eu-
rope, and cancel all orders for Ameri-
| can manufactures.
| They believe that the Treasury an
| ticipated this and is ruthlessly tndiffer-
ent to the fate Of American investments
in Russia. They demand, therefore, to
be told why the administration in
! Washington, If it did not want Amer
lean citizens TO do business in Russia,
did not say so long ago. The oft-re-
peated warning that American mer-
| chants would trade at their own risk
was no adequate warning. they contend
OF such action as this. 1t was a purely
perfunctory way of saying that no dip
lomatic support could be given Amer
ican interests while there existed no
diplomatic relations. a fact which no
exporter needed to be told.