Bigger Barters

Germany's No. 1 economic war problem is to persuade, by hook or crook, her neighbors to produce and deliver to her much-needed war materials. The Allies' big job is to persuade them not to. Last week's action on the trade front went mostly in favor of the Nazis:

-- Last August, just before the Nazi-Communist non-aggression treaty was signed, the Soviet Union and Germany concluded a barter trade treaty. Germany gave $80,000,000 worth of credits to be applied to manufactured goods to the Soviet Union; Russia reciprocated with the promise of $72,000,000 worth of raw materials. The exchange was to cover two years.

Since then Russian trade with Britain and France has virtually collapsed, and Germany has lost half of all her import & export trade because of the blockade. As a result a German trade mission headed by Dr. Karl Ritter, former Nazi Ambassador to Brazil and largely responsible for the huge pre-war Brazilian-German barter trade, has been in Moscow to make bigger,better arrangements. Last week, as the mission started for home, it was announced that another Nazi-Bolshevik trade treaty had been signed which, Nazi officials boasted, would give Germany all the imports she needs to defeat the purposes of the Allied blockade. The Russians were not less boastful in pointing out that Russia's raw materials and Germany's industrial plants complement each other.

The new treaty's terms were kept a military secret, but bragging Nazis let it be known that they expected the exchange of German manufactures, arms and industrial installations for Russian oil, wheat, cotton, fodder and manganese to reach more than $400,000,000--i.e., more than in 1931, the banner year for Soviet-German trade. Most people thought the Nazis were having day dreams.

In Berlin there was talk of German technicians going in force to "organize Russia"--particularly her railroads, refineries, canal system. This was easier said than done. The job would take years, the Russians themselves might not like such a big dose of German efficiency and the whole business would be contingent on the continuation of a standstill war in the west. While the Russian transportation system never has been much, Germany's has been so overworked of late that it has begun seriously to deteriorate. Despite all the bluff about Russia supplying oil to the Reich, it was noted last week that at the Rumanian port of Constantsa on the Black Sea, the first post-pact Russian tanker with oil consigned to Germany had just arrived. The shipment--12,000 tons--was to be refined in Rumania and then shipped by rail through Hungary to the Reich--a long, expensive process.

-- Both Allied and German trade missions have been wooing Italy for weeks. The French, for instance, ordered Italian blankets. They paid for them even though the purchasing officer found he could stick his hand through them. A smarter French trick was to buy up all of Italy's spare locomotives--just to keep Germany from getting them. Great Britain has allowed Italian freighters loaded with German coal to proceed from Hamburg through the blockade, but only because it was hoped that the coal would keep Italian factories going,which in turn would produce goods for the Allies.

Lately Great Britain proposed to supply coal which Italy needs, in return for Italian manufactures. Germany apparently put in a better bid, offered coal at cheaper prices and last week the British trade mission returned to London. Before long, it was expected, Britain would play her trump card, stop the Hamburg shipments and then wait and see how much of the 12,000,000 tons of coal that Italy annually needs can be transported through the Brenner Pass over Germany's sorely overworked railroad system.

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