Evening star., 1933-10-08
SOVIET EXPECTED
TO SQUARE DEBTS
u. S. Officials Believe These
Now Stand as Biggest
Recognition Barrier.
E. the Associated Press.

American Government officials who
h4ye been studying the Russian QueS-
ton under direction Of the President
have discovered that, although Russia
hls made no Official acknowledgment
Of responsibility for the debts repu-
Gated in one of the first DEGREES by
tie Soviet government, she is indi-
rcctly making composition with some
of her creditors.
Recent developments along that lire
tat have come TO the attention o.
American Coy lernment officials are re-
gardcd by them as offering the posi-
blllty of breaking an impasse that has
existed between the United States and
Russia since Lenn and his fellow Bol-
shevikS assumed power in 1917. Since
many Government officials no longer
regard Communist propaganda as men-
acIng to this country. they look upon
settlement OF the debt question as the
chief obstacle to recognition.
Claims which America has upon
Russia are in three categorles: The
direct lean of Sl87 100000 that America
made TO the Kerensky government for
tho purchase of supplies; Russian gov
eminent bonds to the principal amount
OF $50 100000 held by individuals in
the United States; property of Amerl-
can nationals Confiscated by the Boil
shevik government, valued at $780,
100000.
Counter Claims Set Up.
Russia has set up claims aggregating
hundreds of millions of dollars to Off
set the claim Of the American Govern
ment for the S187,000,0OO. Russia's
demand for payment was based upon
her allegation that American troops de-
stroyed Russian property in the Arch
angel ard Siberian expeditions. That
clam has never been given any status
By the American Government and un-
doubtedly will be subject of negotla-
tion before any recognition might be
extended.
Although Russia has consistently
maintained she Will net compensate IN
dividualS or corporations for their
losses on repudiated bonds or on con-
fiscateo property, officials have viewed
recent developments as relaxation OF
that determination.
In negotiations for French credits.
Russia offered per cent interest on
leans that normally carry 6 per cent.
saying she was not interested in what
happened to the , per cent bonus.
American officials regarded that as ar
indirect method of composing the
claims of creditors The 2 per cent
would be impounded By the French
government and distributed among
Russian bOndholderS.
so Cents on Dollar
American Government officials have
been informed that under the arrange
ment. those who have claims would ts
compensated to the extent of apprOXi-
mately 80 per cent Of the capital Of
their claims. This would be tanta-
mount to a settlement on the basis of
80 cents on the dollar. If such an ar
rangement were approved between
America and Russia. it would take care
Of the $4,000 900 in bonds privately
held
1t has also developed that Russia is
adopting an arrangement by which she
has made some reparation TO private
companies whose property was confls-
Gated. In contracts made recently with
American and English oil companies,
Russia paid a bonus of per cent which
went to old holders of oil contracts
In recent contract, the General
Electric Co. achieves repayment of part
CT its claim against the Russian govern
Eent.
In other late negotiations. those who
held claims have been unofflcially as
sured that Russia would take care Of
old obligations.
Some government officials said they
did not put too much stock in the allur-
ing possibility of "five-billion dollar
market" in Russia They took the real
istic view that since there was one
agency that did the buying. and that a
government agency. America would get
as much trade as Russia wants her to
have. They were described as desiring
assurance of how much that trade
would be.
Credit Is Big Factor.
They indicated a realization, too.
that the figure Russia set would depend
upon the amount of credit she could
get in this country. Trade with Russia
would be a question of give and take,
but recognition was regarded as pre-
liminary step to revival of a trade now
virtually dead
Trade relations reached their height
III 1881 when Russia bought STA 393.-
537 ii goods from this country and
sold it s24 385 1856 That dropped in
1882 to 2,648,000 in exports to Russia
and S9,704,000 in imports. This year
it has virtually disappeared. since for
the first six months Of 1888 the exports
have been S250O000 and imports
$4,000 900
Part of that decrease has been at
tributcd to the depression and part to
the fact that England, Germany, Italy
land Czechosloyakia have guaranteed
contracts their nationals make with the
Russian government The American
GoVernment. upon the other hand.
adopted a policy several years ago
which forbade the sale of securities to
the American public to finance Russian
contracts.