Evening star., 1934-04-29
|SOV|ET IS ANXIOUS
DEBT. VIEW
Trade Held Up Pending In.
depreciation of John
son Act.
BY CONSTANTINE BROWN,

among the Qelaultlng countries.
The Amtorg Corporation has re-
Gently received a number of orders
from Russia, but they have not been
placed in the United States because
New York attorneys have advised
their clients who desire to do busi-
ness with the Soviets that the john
son act may conceivably be inter-
preted as applying to Russia as well
as to the other defaulting nations.
AS a matter of fact the Soviet gov
ernment does not consider itself in
| default, since 1t has not yet signed
any debt funding agreement.
Discussion Provided.
When the Soviet government was
recognized by the Government Of the
| United States, it had agreed to dis
cuss the question of the Russian debts
to this country. But nothing was said
in the letters exchanged between
President Roosevelt and Maxine
Litvinoff, the Soviet commissar for
foreign affairs, about any trade deal
| ings being subject to an immediate
settlement of the debt of the previous
RUSSIAN governments.
The Russians agreed to discuss the
matter with the American Govern
ment and do their best to reach a
satisfactory settlement, but it was
understood that the discussions will
have to be somewhat protracted be-
cause Of the many technical diff
culties involved in establishing what
portion of the $1s7 900 900 lent by the
American Government to the Russian
government during the revolution
was actually used by that govern
ment and for what purpose.
Government Was Bankrupt.
The Soviets have taken over from
Kerensky bankrupt business. When
it came into Office Lenine announced
that none of the debts incurred by
the previous governments would be
recognized. The Soviets started busi-
ness afresh. The United States Gov
ernment refused to recognize the sue
ceSSor OF the CZariSt and the
Kerensky governments, and one of
the reasons for the non-recognition
was the fact that the new concern
refused to honor the old debts.
When, last October, the American
Government decided to recognize this
new administration in Russia, the
representatives of the Soviets promised
to settle equitably the old debts.
But this will necessarily be a long
process. There are any amount of
difficulties in the way of a fair esti-
nation as to what money actually
reached Russia from the sl87 900 900
advanced by the United States,
Papers Removed.
A few days before recognition was
extended TO the Soviet government.
the representative Of the Kerensky
regime, Serge Ughet, removed from
the premises Of the embassy 700 boxes
containing papers and documents.
They contained many data important
for the establishment of the actual
amounts sent to Russia and showing
the purpose for which the money was
spent. According to officials Of the
Soviet embassy, when these boxes were
examined later by officials of the State
Department and the Russian embassy,
| it was found that 200 boxes were miss
ing; they contained allegedly personal
papers Of Mr.. Ughet, but this does not
satisfy the officials of the U. S. S. r.
Furthermore, this year there was
still a balance of s60,000, 900 Of the
original loan Of $l87 900 900 in the
National City Bank Of New York. The
House Foreign Affairs Committee dis
cussed the matter and Representative
McFadden of Pennsylvania revealed
the following facts: During our in
vestigation of what was done with the
Sl87 600 900 the State Department
passed the buck to the Treasury De-
partment and the Treasury Depart
ment passed the buck back to the
State Department. Finally the State
Department referred the committee to
a nondescript Russian Ambassador,
Boris Bakmetieff, for information as
to what was done with the s1S7, 900, :
600 lent to Russia. I am frank to
say to you that the examination which
I and other members of that COM
mittee conducted indicated that little
of the $l87, 100000 went to Russia.
When we started investigating what
happened to the money there was
over $50, 900 900 on deposit in the Ma
tional City Bank of New York and
when we completed our examination
the funds had been drawn to
81 ,000, ,000."
Claim Opponents Got Money.
Naturally that under the circum-
stances the Soviet government is
interested in learning what money
actually went into Russia and for
what purpose. The Soviet embassy
here charges that a good deal of
what was expended by the representa-
tives of the former government went
to support the anti-bolsheviSt moves
of Kolchak, Denekine, Youdenitch
and Wrangel, that is to say, to sup
port civil war, after kerensky had
been overthrown and had left Russia.
Another important slice of the loan
granted to Kerensky, the SoViets
charge, went into the pockets of the
former representatives of that regime
and the Soviet does not see why these
sums should be charged to the Rus
sian people now.
All these facts, Moscow claims,
must be taken into consideration in
the settlement of Russia's indebter-
ness to the United States and it is
natural that the process of finding out
what was actually spent for Russia
and what was spent by individuals
who no longer represented any de
facto or de jure government.
But, the Russians say. this does not
mean that Soviets should be treated
in the same way as the defaulting
nations.
The Soviet government has not
signed any agreement with the
United States for the refunding of
the war debt yet. It has definitely
given assurances that it will pay
whatever the two parties may agree
that it actually owes. The johnson
act, the Russians say, was intended
to punish the defaulting nations, that
is to say, those nations which signed
an agreement to pay their debts and
in spite of the signature of an official