U. S. Relations

Winnowing from the immense mass of untrustworthy "official" Soviet statistics, checking wherever possible from extra-Soviet sources, the Foreign Policy Association of Manhattan published last week an interesting if necessarily inconclusive report: The Soviet Economic System, in Operation.

Points keynoted:

Soviet-U. S. Trade. According to U. S. Department of Commerce statistics, trade between the U. S. and Soviet Russia in Europe was distributed as follows during the past two years:

1924 1925

U. S. exports* to Russia $41,314,335 $68,195,696

U. S. imports/- from Russia 8,144,373 12,787,731

Four Soviet trading organizations and two mixed companies carry on virtually all trade between private U. S. interests and the Soviet foreign trade monopoly. Concerning these activities Mr. Reeve Schley, a vice-president of the Chase National Bank of Manhattan, is quoted: "The Chase National Bank has been doing business with Russian organizations here and in Russia for the past two years (1924 to date). . . . Our experience during this period has been entirely satisfactory."

Soviet concessions within Russia to U. S. citizens number at present 13. W. A. Harriman & Co. of Manhattan operate the chief of these concessions: a 20 year arrangement whereby they have agreed to expend $4,000,000 on developing manganese and peroxide deposits in the Socialist Soviet Republic of Georgia and to pay royalties of from $3 to $9 per ton on the exported product to the Soviet government.

Internal Soviet Economics. Institutions of a "capitalistic" nature are slowly being reintroduced into Russia. An example in point is money. Up to 1921, the Soviet authorities continuously debased the ruble by inflation until it all but vanished, with the avowed intention of employing thereafter a system of communal barter into which money would not enter. Since 1921 a reversal of this policy has resulted in the creation of a new State Bank and the introduction of the Tchervonets (plural "Tchervontsy"), a monetary unit equivalent to 10 pre-war gold rubles ($5.15).

Allegedly 50% of the retail trade of Soviet Russia is now in the hands of private traders, but foreign trade continues a Government monopoly.

* Chiefly cotton, machinery and chemicals.

/-Chiefly furs, manganese ore, sheep casings and caviar.