It is real enough to the Finns to make them spend
money, and one doesn't spend money on measures to
meet a danger one only faintly fears.
money, and one doesn't spend money on measures to
meet a danger one only faintly fears.
Soviet Union - 1931 - Fighting the Red Trade Menace
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? 206 FIGHTING THE RED TRADE MENACE
wood Buyers Corporation. The statistics meant, said
the Swedish and Finnish representatives, that the
producers in their two countries had been forced to
agree to reduce their exports next year to 80 per cent
of the 1929 exports. I asked authoritative sources in
Stockholm, "Does that mean you surrender 20 per
cent of your market to the Soviets? " "It does," was
the reply.
"And if the Five-Year Plan is fulfilled? "
"It means the Swedes and Finns will have to give
up 50 per cent of their exports. "
"And what is there to be done about it? "
Then followed a reasoned statement that deserves
the attention of anybody who is interested in know-
ing what Europe is doing or thinking of doing to
protect itself against "The Red Trade Menace," a
phrase that may or may not be justified as the des-
cription of the effect of the Soviet exports upon some
countries and upon some industries, but that would
be admitted even by Soviet partisans to be thoroughly
applicable in the case of the Swedish and Finnish
timber industry.
"There are three conceivable ways to check the
Soviet competition, or to ameliorate its effects upon
us. One is war. One is an international boycott. One
is an agreement. War," continued the speaker, "is
absolutely out of the question. An international boy-
cott is impossible. There remains agreement. This
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? FIGHTING THE RED TRADE MENACE 207
forced export of the Soviet Union is hurting her as
much as it hurts us, if not more. It is a question
whether she will be able to carry out her Plan in full,
since she has cut a good deal of the most conveniently
situated timber and from now on the problem of
transporting felled trees to waterways will become
increasingly difficult. The average distance the
Soviets have to carry their logs to water now is
about five miles, compared to half that distance in
Sweden.
"From month to month this distance will increase
for the Soviets. In watching the Five-Year Plan re-
sults you must pay attention now to the timber trans-
ported, not the timber cut. Up to April 10 of this
year that had cut 118,000,000 cubic meters of timber,
77. 6 per cent of the amount called for by the plan.
True that is an enormous lot of timber, but of it
they transported in that time only 81,000,000 cubic
meters, or 61. 3 per cent of the timber transport
called for by the plan. We can afford to wait until
they come to us with a proposal for an arrangement
or some kind of export quota system. The position
of the three countries, Sweden, Finland and Russia,
is favorable for such an agreement. Among the three
of us we produce half of the world's sawn and planed
timber for export. Our normal production for ex-
port should be about the same, each turning out about
1,000,000 standards. We can afford to wait. "
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? 208 FIGHTING THE RED TRADE MENACE
But from the Soviet side comes precisely the same
statement: "We can afford to wait. "
And here the matter stands today. Both sides
beyond doubt want a truce. Allowance has been made
for any statement made by one side about the other
side, yet the burden of evidence seems in favor of
the correctness of the Swedish and Finnish allega-
tions that some of the Soviet export is too costly to
be worth while, even under the peculiar economic
conditions of the Five-Year Plan. They cite, for ex-
ample, an instance of how expensive the Soviet's load-
ing difficulties are in Leningrad, where one ship is
said to have waited so long for her cargo that after
it had been loaded the demurrage charges when added
to the freight exceeded the value of the cargo, and
this loss was not in paper troubles, but in precious
foreign currency.
This cannot be typical, but in timber as in other
exports it is plain that the Soviet Union has every-
thing to gain and nothing to lose by entering into
an export quota pool that would insure as large re-
turns from the smaller quantity of exports as could
be obtained outside the pool by a greater quantity
of exports. Yet in the opinion of the timber trade
the Soviets, for the sake of obtaining a still better
tactical position, probably will continue for some
time, perhaps a year, perhaps two, to strain every
nerve to accomplish the extreme limits of the Five-
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? FIGHTING THE RED TRADE MENACE 209
Year Plan for Her timber exports. The bigger the
share of the world market they can seize, the bigger
share they can claim when the time comes to talk of
export quotas.
Meanwhile, in the timber trade the period has
arrived resembling the year 1917 in the World War
when both sides were weary and wishing peace, but
neither side willing to take the first step for fear
of showing weakness.
If there is any lesson to be drawn by the outside
world from this experience of the Swedes and Finns,
one lesson would seem to be that the non-Soviet ex-
porters have little hope of sympathy from the im-
porters. The Swedes and Finns took much pains to
lay their case before the British importers, appealing
to them not to ruin Swedish and Finnish business
and not to forsake old trade friends. But the Brit-
ish, who could become quite excited about the pos-
sibility of Soviet manufactured articles competing
with the British products, showed but faint traces of
interest in the effect of Soviet timber on the Swedish
and Finnish trade.
All this is highly instructive to the student of
Soviet commercial relations with the outside world,
but Americans probably will be more interested in
the developments in the oil business in Sweden, where
two American companies, the Standard and the
Texaco, are keenly concerned. The war on this sector
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? 210 FIGHTING THE RED TRADE MENACE
is, if anything, more ferocious than it has been in
the timber trade. Here conflicting statements render
judgment of the immediate balance of forces dif-
ficult, but the trend toward an ultimate Soviet vic-
tory appears clear and is even partly admitted by
their opponents.
While there is constant talk of the chances of a
great capitalist oil trust coming to some agreement
with the Soviet Oil trust, few persons have realized
how far along toward obtaining and insuring its
share of the world oil market the Soviet Oil Trust
already has gone in the form of regional agreements.
Under such agreements, the Soviet Oil Trust already
has 35 per cent of the German market, 22 per cent
of the English market and, without any agreement,
more than 25 per cent of the Italian market and a
certain 10 per cent, but estimated 15 to 20 per cent,
of the French market, counting the French navy's
imports.
For a concern so rankly outside, this is a fairly
large share of Continental imports, but the Soviet
Oil Trust appears to be only gathering speed. Until
two years ago it virtually ignored the Scandinavian
market. Today it is putting direct sales organiza-
tions into Denmark and Norway and here in Sweden,
through the "Naphtha Syndicate," selling directly,
it has 25 per cent of the market and is holding out
for 40 per cent when and if the Standard, Texaco,
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? FIGHTING THE RED TRADE MENACE 211
Shell and Anglo-Persian are willing to make an
agreement.
While the Soviets' competitors refuse to admit
that the Naphtha Syndicate has more than 15 per
cent of the trade, they grant that the Soviet share
probably will climb to 20 per cent this year. Mean-
while the price war is vicious and admittedly un-
profitable to anybody except the Swedish consum-
ers, who are buying gasoline cheaper than ever in
their history.
In 1926 gasoline here was forty cents a gallon; in
1927, thirty cents; January, 1930, twenty-seven
cents; October, 1930, twenty-two cents; April, 1931,
twenty cents and today with rebates of one kind and
another consumers are getting gasoline as cheap as
fifteen cents a gallon. With a tax of eight cents a
gallon, transport costs of one cent a gallon and
estimated overhead and distributing costs of six cents
a gallon, the price of fifteen cents a gallon would
leave precisely nothing.
Earning nothing, each party at the moment is
waiting for the other to weaken, but the Soviet share
of the market, whether 15 or 25 per cent, is ad-
mittedly growing and an appreciative public is
keeping in touch with the Naphtha Syndicate's prog-
ress through half page advertisements in newspapers
announcing that Soviet oil imports climbed to second
place among all the oil companies the first quarter
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? 212 FIGHTING THE RED TRADE MENACE
of 1931. This touch of American publicity sense, un-
usual in a Soviet enterprise, may have been due to
the fact that the manager of the Soviet Oil Com-
pany here is American; probably the only Amer-
ican employed anywhere in the world is a respon-
sible position in the sales organization of the Soviet
Foreign Trade Monopoly.
Excited as are the Swedish timber exporters over
the purchases by other nations of Soviet exports of
timber, the Swedish public maintains a grateful calm
in the face of Soviet exports of oil to Sweden, and
while Soviet competition in timber has evoked pro-
longed Swedish protests, the only voices audible in
Sweden against Soviet competition in oil are Amer-
ican and British voices. Sweden, it may be recalled,
produces no oil.
Sweden does produce wheat and rye. Not enough
for the whole consumption, but enough to be heavily
affected by the Russian grain if it were permitted to
come unchecked into the country. It is not surpris-
ing, therefore, that now just before the Soviet grain
export season gets under way, Sweden has estab-
lished a state grain and flour monopoly, the "Swedish
Grain Association," for the import and sale of wheat,
rye, grain and flour. On the lines of the Norwegian
system, the Swedish monopoly has the same purpose
to protect domestic growers and to that end has an-
nounced it will buy all the wheat and rye offered by
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? FIGHTING THE RED TRADE MENACE 213
the Swedish producers at prices averaging from
forty to fifty cents a bushel more than the market
price for foreign grain. This is an even greater price
differential than that paid by the Norwegian mo-
nopoly, and the Swedish farmers are happy at the
genuine protection against the Soviet, American and
Canadian competition.
Of any other move directly or indirectly to check
or control the Swedish trade with the Soviet Union
there were no indications discoverable in a short visit.
Sweden has an active trade balance with the Soviet
Union showing about $3,000,000 on the plus side in
1927-1928, nearly $4,000,000 in 1928-1929, and
$7,000,000 in 1929-1930. She sells chiefly cream
separators, boring machines, turbines and saws--the
saws used to cut the timber the Soviet Union now is
exporting at the expense of the Swedish sawmill
owners.
But the men who make the saws are not the same
men who run sawmills, so the record shows that while
the Swedish timber exporters were growing more
vehement in their protests against the Soviet timber,
the Swedish saw manufacturers were selling more
saws with which to cut that timber. In 1927-1928
they sold saws to the value of $650,000; in 1928-
1929, to the value of $700,000, in 1929-1930 to the
value of $1,300,000. Sweden's total exports to the
Soviet Union in 1929-1930, counting the imports
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? 214 FIGHTING THE RED TRADE MENACE
into the Soviet Union by the Swedish concessions
operating there, amounted to nearly $11,000,000
while the total Swedish purchases from the Soviet
Union, chiefly of oil and grain, amounted to about
$4,000,000.
All the Swedish sales to the Soviet Union are
made without a Government guarantee and I was
assured that several of the largest Swedish export
firms carry their own Soviet notes. The average
credit time granted to the Soviet trade representa-
tives here is thirteen months. Those concerns that
wish to discount their Soviet notes will be refused
by the Swedish banks if they wish to discount with-
out recourse. They may, however, discount at the
Soviet Bank here. This Soviet financial practice is
worth attention. For example: A Swedish manufac-
turer sells a bill of goods for $100,000 to the Soviet
commercial representative, who gives a promissory
note for $106,000, payable in thirteen months.
Unable to discount the bill without recourse to
the Swedish Bank, the manufacturer may, however,
take it to the Soviet Bank here and receive for the
bill around $90,000 to $95,000 cash. The Soviets
thus have bought back their own bill at a discount
of 11 to 16 per cent and have in effect merely ob-
tained a rebate of that much for cash payment on
the goods they purchased. Such are the pecularities
of finance, however, that the Soviets find this method
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? FIGHTING THE RED TRADE MENACE 215
gives them more leeway than the payment direct in
cash, as their bank here can borrow from Swedish
sources up to a certain amount to use for discounting
bills. When that sum is exceeded, however, and the
Soviet Bank has no more funds for discounting then
the Swedish manufacturer who wants to discount
without recourse must take his bill to Paris or else-
where, where "black brokers" will favor him with
cash at 27 per cent.
All these other features of Swedish-Soviet com-
mercial relationships, oil, saws, active trade balance,
are important to recollect in judging the great
timber war that dominates the picture. In that war
the Swedish and Finnish timber trade appears to
be losing faith in the effectiveness of the forced labor
issue. They have observed that prices, not pathos,
have decided the business in England, and when the
British Parliament turned down the bill to forbid
the import of products of forced labor, interest in
the "Russian conscripts" flagged. Swedish and Fin-
nish exporters have not entirely abandoned the hope
of affecting the hearts of the British and other con-
sumers, but the attention of the trade now is directed
largely toward the hopes of affecting the pocket-
book of their competitor.
An agreement to divide the market with the Soviet
Union seems the only solution to many who have
seen how difficult it is to keep the Soviet Union out
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? 216 FIGHTING THE RED TRADE MENACE
of the market. Sentiment has been retired to reserve
stations and "sound business sense" brought up to
the front line. With these troops the Soviet forces
are accustomed to deal and signs are not lacking
that the timber war may end in "peace without
victory. "
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? CHAPTER XX
Helsingfors:
On the hotel tables of Helsinf ors stand round green
boxes for the reception of coins. On each box is the
inscription: "Give your bit for gas defense. "
Many builders in Helsingfors and other Finnish
cities have included in the specifications for their
homes and factories gas-proof rooms. The Red Cross
Hospital now being erected here, to be the largest
hospital in Helsingfors, has one gas-proof ward.
Most striking of many manifestations of anxiety
in this country, the agitation for gas defense is only
one evidence of the feeling that Finland's three mil-
lion folk harbor for their huge neighbor on the east,
the land that for a hundred years held Finland sub-
ject and that today, with its 150,000,000 mobilized
behind its Five-Year Plan, seems to Finland much
more than a mere trade menace.
Soviet exports of timber have cut more deeply
into this country's economic life than Soviet exports
of any other commodity have affected any other
country, here much more than in Sweden, yet Fin-
land is not thinking primarily of timber. She is
thinking of gas.
Refore the nation looms a nightmare: On one white
217
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? 218 FIGHTING THE RED TRADE MENACE
night like tonight, when one can read a newspaper
without artificial light at 11 in the evening, a swarm
of Red army airplanes rises from the Leningrad
airdrome, just a step across the Finnish border. High
above the Gulf of Finland fly the Red planes. One
short hour from their base they circle. Below them
sleeps Helsingfors.
Now Helsingfors has been taught that such a
fleet of airplanes could discharge enough gas bombs
at one visit to exterminate the population of a com-
munity much larger than this city of 230,000. On
land the Finnish army believes that it is good enough
to hold back the Red army. In the air the Finns
know that they are virtually helpless, with a maxi-
mum of 300 planes to the Red army's estimated
1,500.
Hence gas masks on hotel tables, gas-proof rooms,
and public agitation to instruct the nation in defense.
It may be fantastic, it may be quite unnecessary, it
may be futile, but whatever justification or lack of
justification there is for this fear, the fear exists.
It is real enough to the Finns to make them spend
money, and one doesn't spend money on measures to
meet a danger one only faintly fears.
Finland, with its recollections of the war of in-
dependence against the Reds just thirteen years ago,
is like a property owner who once suffered a dis-
astrous fire. Finland is taking out fire insurance.
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? FIGHTING THE RED TRADE MENACE 219
And Finland fears fire more than any country could
that has not experienced it. This is the first nation
encountered among nine already visited on this strip
where deep-seated and ever-present apprehension
exists as to what the Five-Year Plan may mean for
its own people.
It is necessary to record these facts to complete
the picture of Europe's attitude toward the Five-
Year Plan. It is equally necessary, however, to put
these facts into perspective and to balance them with
the opinions of many students of the Five-Year
Plan in other countries besides those bordering on
the Soviet Union. Many of these students without
any political purpose to serve and conversant with
the program of the Soviet authorities for the Soviet
Union and with the program of the Communist In-
ternational for a world revolution, do not credit
Moscow with aggressive military intentions today.
To this school of observers belongs the present writer.
Those acquainted with the change in tactics of
the world revolution adopted by Moscow since the
Five-Year Plan went into effect are aware that today
the plan is first to make the Soviet Union strong,
economically independent, militarily powerful and
to elevate, if possible, the standard of living of the
Russian worker to such a level that the proletariat
of Western Europe will find in the existence of the
Soviet system the greatest incentive to emulate it.
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? 220 FIGHTING THE RED TRADE MENACE
When this hypothetical condition arises and the
Communist Party of some European nation seizes
power and the Soviet Union at the same time has be-
come strong, the Russian Communist Party, as every
reader of its proclamations must admit, would be
untrue to its own avowed principles if it did not
promote by every means in its possession the effort
to establish also in other countries a dictatorship of
the proletariat.
First of all, though, the Soviet Union must have
become strong and must have gone considerably
further than it has toward presenting the European
working class with an enviable example of proletarian
comfort. And that, if it is to happen will take time.
So to this school of observers it appears plain that
the Soviet Union now has more reason to wish peace
and more reason to desire stability in the world
markets, where it sells its commodities in order to
achieve the Five-Year Plan, than have any of its
neighbors, lacking such a plan, anxious though they,
too, are for peace and hard-pressed though they,
too, are by the world economic depression.
For to the Soviet Union peace today is a means to
an end. To other nations it is an end in itself. And
if war tomorrow is to be necessary for the sake of
world revolution it can only be successful, accord-
ing to this program, if the Soviet Union today is
permitted the years of peace required to establish
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? FIGHTING THE RED TRADE MENACE 221
its economic independence and to elevate if possible
the standard of living of Soviet workers above that
of their Western neighbors.
This analysis appears to impartial observers to
explain equally well the present comparative qui-
escence of the Communist International, the shifting
of emphasis in Moscow for the moment from the
world revolution to the national constructive effort
of the Five-Year Plan and the obviously genuine
fear of war expressed almost daily by the Kremlin.
But just as Moscow cannot conceive that the bour-
geois world is going to permit the Soviet Union to
attain its strength undisturbed, so Helsingfors can-
not conceive that Moscow wants at this moment
nothing so much as to be let alone.
To all Finns save that 10 per cent of the popula-
tion which voted Communist before the Communist
Party was outlawed, the Five-Year Plan is a very
black cloud on this nation's horizon. The view that
the Five-Year Plan is going to succeed is gaining
ground rapidly here and only a few Finnish leaders
venture to express the hope that it may be true that
when the Five-Year Plan is achieved the Soviet Union
will divert some part of its export to domestic con-
sumption and thus will relieve the world markets of
the excess of Russian products. It was curious to
hear this view advanced by a man prominent in the
anti-Soviet movement.
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? 222 FIGHTING THE RED TRADE MENACE
Most curious, however, was another view outlined
by a leading citizen of Helsingfors who declared that
it was his belief that the breakdown of the Five-Year
Plan would be the worst thing for Finnland, since
Moscow would then seek an outlet for the disappoint-
ment of its people and would send Red hordes across
the Finnish border to loot and plunder.
Thus Finland expresses its fundamental convic-
tion that nothing good can come out of Russia.
Failure or success, the Five-Year Plan is bound to be
bad for Finland.
This anti-Russian feeling, based at least as much
on the resentment at the century of Russian oppres-
sion under the Czars as at apprehension of Soviet
aggression, reaches deep into Finnish hearts. I of-
fered a Finnish girl a cigarette and said the Russian
word for "please. " She rejected it and said: "I had
to study Russian four years when our country was
under Russia and our schools under Russia. I never
want to hear the word Russia again. We hate the Rus-
sians. "
These old historical grievances are enough to war-
rant the assumption that Finland would be on bad
terms with Russia under any Government. But to
them has been added a very real fresh grievance in
the form of the Soviet Union's competition in the
timber market. For Finland this market is much more
important than for Sweden. Of Finland's total ex-
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? FIGHTING THE RED TRADE MENACE 223
ports 85 per cent are wood or things that come from
wood.
The progress of the timber war between the Soviet
"Exportles" on the one hand and the Swedish Wood
Exporters' Association and the Finnish Sawmill
Owner's Association on the other hand, has been told
from Stockholm.
There it appeared that an armistice was in sight
and that an agreement to divide the market with the
' Russians might eventually come. That still appears
a possibility even a probability in Helsingfors, but
not so probable as in Stockholm. For the Finns have
lived for the last hundred years on the principle that
the only way to get along with the Russians is to
fight them. And fighting a price war is the method
recommended by Risto Ryti, governor of the Bank
of Finland, in an address that has had sufficient res-
onance in the timber world to have evoked already
complaints from London that not the Russians, but
the Finns, were upsetting the market by offering
their timber at dumping prices.
Mr. Ryti's speech was a most refreshing docu-
ment after two months' experience of listening to the
plaints and pleas of business men in other parts of
Europe for government protection and international
protection, but above all for protection by somebody
else against Russian dumping. Mr. Ryti's advice
was: "Protect yourselves. Undersell the Russians. "
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? 224 FIGHTING THE RED TRADE MENACE
It was typical of Finland that while European
nations twenty times the size of this tiny land have
quivered before the "Red Trade Menace," it re-
mained for a Finnish banker to launch the slogan,
"Fight," and to get an immediate response. Mr. Ryti
by this speech became a financial Paavo Nurmi. For
without employing the word, Mr. Ryti called, in
substance, for the Finns to use "seesoo," and it is
with "seesoo," that Nurmi wins his races and makes
his records.
This strange word rendered here phonetically was
the object of much curiosity at the Amsterdam
Olympic games, where Nurmi proved again his title
as the greatest runner of all time. Nurmi, it was said,
used "seesoo. " He went into a trance before each
race, contemplated his navel and gained superhuman
strength therefrom. "Seesoo" was conceived to be a
Finnish form of Yogi. "Seesoo," however, it was
explained to me by a Finnish scholar, is simply Fin-
nish for that quality which the English call "intesti-
nal fortitude" and Americans call "guts. " In the
Finnish scholar's terms it is "the unconscious capital
of a man after he has exhausted his conscious re-
sources. " This capital is what Mr. Ryti told the
Finnish saw-mill owners to draw upon.
After analyzing the various reasons why it ap-
peared improbable that the Five-Year Plan could
succeed Mr. Ryti proceeded to make some remarks
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? FIGHTING THE RED TRADE MENACE 225
that undoubtedly should be interesting to other than
Finnish competitors with Soviet exports.
"If we were to assume, however, that the Five-Year
Plan succeeds it would theoretically only be to the
advantage of world economy, for the greater the
production the more complete the satisfaction of
demand for commodities," he said, "and even though
Russia were to continue to export at low prices, world
economy would still theoretically be the gainer. For
why does Russia export? Naturally in order to be
able to import goods and pay for them. "
"So that," continued Mr. Ryti, "if they sell cheaply
and buy dear the result is that Russia must slave
for the benefit of the rest of the world. In practice,
however, the drawback to this system is that those
who export the same commodities as Russia, lose, and
if their economy is brought into disorder, others lose
indirectly by it. We, and in particular our saw-mill
industry, belong to those fated to lose. "
The banker went on to admit that Finland had
greatly increased her timber export by reason of Rus-
sia's decade of absence from the market and said
that the Soviet Union had now attained Russia's
1913 average export and that Finland's had cor-
respondingly declined also to her 1913 average, and
that this was tolerable, but that any more losses would
be intolerable.
"We cannot withdraw from the market. We must
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? 226 FIGHTING THE RED TRADE MENACE
fight for it. But people say that we cannot compete
with Russia owing to the economic methods employed
by that country. We must, however, do so, and we
can do so with hopes of success. Our forests are better
situated, our waterways are better and shorter, our
men and horses are better provisioned, and the skill
and efficiency of our workers are higher than those
of the conscripted workers of Russia.
"Our organization is more elastic and has a greater
sense of responsibility, our saw-mills are more ef-
ficient, our shipping conditions are better and our
freights are lower. We can offer specifications more
satisfactory to buyers and guarantee prompter and
more regular shipments than can Russia.
"Even Russia does not get her timber for noth-
ing, and the deeper they cut the further they must
go for their timber, and even if Russia cared noth-
ing for making profit the fall in the price of timber
comes at a very inconvenient time for her. Its effect
on the success or non-success of the Five-Year Plan
can be great.
"Every fall in timber prices," the banker finished,
"will affect Russia's trade balance and hinder the
realization of the Five-Year Plan. In our case com-
petition for the markets will demand great efforts--
close cooperation between shippers, and temporary
contentment with low forest prices. It demands also,
regrettably enough, the maintenance of wages at
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? FIGHTING THE RED TRADE MENACE 227
levels lower than before. All this, however, is essential
if we are to retain our markets, for if we lose them
we will have to fight hard to get them back. We must
fight to keep them now. "
Mr. Ryti's recommendations were delivered against
a background that made the possibility of their being
carried successfully into operation appear good. After
all one had heard of the terrific slice Russia had taken
out of Finland's export trade it was natural to expect
to see something like destitution in Helsingfors, to
see mobs of unemployed, to observe, in short, a coun-
try flat on its back.
Nothing of the sort. Helsingfors, like all Northern
cities, has an air of asceticism but in a short sojourn
here, I could discover no signs of real poverty, and
I was credibly informed that there are none who
hunger. The so-called "sum" sections consist of houses
much better than those in Berlin's famous model tene-
ment district. And in Helsingfors I saw more new
apartment houses than I have ever seen since Baku,
where the Soviet oil trust covered several square miles
with homes for workers.
The American Legation, commercial attache and
consular officers are housed in a new office building
that "towers" seven stories and justifies its name of
skyscraper by possessing all the finish and equip-
ment of the most up-to-date structures of that type
in America. Its lower floors are occupied by a de-
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? 228 FIGHTING THE RED TRADE MENACE
partment store that would do credit to an American
city three times the size of Helsingfors. One depart-
ment especially is a real cause for civic pride. It is
a book store "The Academic," said to be the third
largest in the world, and with an English section
larger than many good-sized New York book stores.
It has twelve miles of shelf space, stocks volumes
enough to fill a National Library, and is only one
of thousands of book stores in this land of 1 per cent
illiteracy.
Most of the astonishing number of new houses in
Helsingfors were built since the Finns' war of libera-
tion in 1918, and a good many of them were built
on surplus profits earned when Finland was able to
sell timber to the customers Russia used to have and
has now regained. In part these buildings, too, were
erected on some eighty to ninety millions of dollars
in foreign loans, chiefly from American banks that,
to judge by their long term confidence in Finland, do
not take "the Red Menace" here as seriously as do the
Finns.
The Finns belabored the British market with the
argument that if the Britons bought Russian timber
tens of thousands of Finnish lumbermen would join
the jobless. But the Ministry of Social Affairs re-
ports that in April 11,584 unemployed registered
at the labor exchanges, or about one in 300 popula-
tion, and the highest figures quoted of all jobless,
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? FIGHTING THE RED TRADE MENACE 229
registered and unregistered is 60,000, or one in every
fifty of the population.
Soviet competition, however, explain the Finnish
saw-mill owners, resulted in more part-time employ-
ment than in actual dismissals.
The Lappo League, that super-Fascist organiza-
tion named for the first battleground of the war of
independence, virtually has eliminated strikes as it
also eliminated the Communist Party, and now would
like to eliminate trade with Russia. The Govern-
ment was willing to suppress the Communist Party,
but not trade, and another surprise of this investiga-
tion not lacking in surprises was to find that Finland,
bitterest of all the anti-Soviet front, furnishes govern-
mental guarantees for sales to the Soviet Union with
75 per cent insurance in a general scheme of export
credits similar to England's and Germany's.
Finland has an active trade balance with the Soviet
Union and last year sold $6,000,000 worth to her
best disliked neighbor and bought $3,000,000 worth
from her. And Finland, who claimed that Great
Britain was betraying her principles by buying
timber from the Soviet Union, herself bought nearly
$2,000,000 worth last year, and in the first quarter
of this year, $50,000 worth. This, it was explained
to me, was nearly all bought by one man, who has
been severely criticized for doing so.
To most Finns, though, the Russian menace is not
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? 230 FIGHTING THE RED TRADE MENACE
commercial. It is military.
? 206 FIGHTING THE RED TRADE MENACE
wood Buyers Corporation. The statistics meant, said
the Swedish and Finnish representatives, that the
producers in their two countries had been forced to
agree to reduce their exports next year to 80 per cent
of the 1929 exports. I asked authoritative sources in
Stockholm, "Does that mean you surrender 20 per
cent of your market to the Soviets? " "It does," was
the reply.
"And if the Five-Year Plan is fulfilled? "
"It means the Swedes and Finns will have to give
up 50 per cent of their exports. "
"And what is there to be done about it? "
Then followed a reasoned statement that deserves
the attention of anybody who is interested in know-
ing what Europe is doing or thinking of doing to
protect itself against "The Red Trade Menace," a
phrase that may or may not be justified as the des-
cription of the effect of the Soviet exports upon some
countries and upon some industries, but that would
be admitted even by Soviet partisans to be thoroughly
applicable in the case of the Swedish and Finnish
timber industry.
"There are three conceivable ways to check the
Soviet competition, or to ameliorate its effects upon
us. One is war. One is an international boycott. One
is an agreement. War," continued the speaker, "is
absolutely out of the question. An international boy-
cott is impossible. There remains agreement. This
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? FIGHTING THE RED TRADE MENACE 207
forced export of the Soviet Union is hurting her as
much as it hurts us, if not more. It is a question
whether she will be able to carry out her Plan in full,
since she has cut a good deal of the most conveniently
situated timber and from now on the problem of
transporting felled trees to waterways will become
increasingly difficult. The average distance the
Soviets have to carry their logs to water now is
about five miles, compared to half that distance in
Sweden.
"From month to month this distance will increase
for the Soviets. In watching the Five-Year Plan re-
sults you must pay attention now to the timber trans-
ported, not the timber cut. Up to April 10 of this
year that had cut 118,000,000 cubic meters of timber,
77. 6 per cent of the amount called for by the plan.
True that is an enormous lot of timber, but of it
they transported in that time only 81,000,000 cubic
meters, or 61. 3 per cent of the timber transport
called for by the plan. We can afford to wait until
they come to us with a proposal for an arrangement
or some kind of export quota system. The position
of the three countries, Sweden, Finland and Russia,
is favorable for such an agreement. Among the three
of us we produce half of the world's sawn and planed
timber for export. Our normal production for ex-
port should be about the same, each turning out about
1,000,000 standards. We can afford to wait. "
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? 208 FIGHTING THE RED TRADE MENACE
But from the Soviet side comes precisely the same
statement: "We can afford to wait. "
And here the matter stands today. Both sides
beyond doubt want a truce. Allowance has been made
for any statement made by one side about the other
side, yet the burden of evidence seems in favor of
the correctness of the Swedish and Finnish allega-
tions that some of the Soviet export is too costly to
be worth while, even under the peculiar economic
conditions of the Five-Year Plan. They cite, for ex-
ample, an instance of how expensive the Soviet's load-
ing difficulties are in Leningrad, where one ship is
said to have waited so long for her cargo that after
it had been loaded the demurrage charges when added
to the freight exceeded the value of the cargo, and
this loss was not in paper troubles, but in precious
foreign currency.
This cannot be typical, but in timber as in other
exports it is plain that the Soviet Union has every-
thing to gain and nothing to lose by entering into
an export quota pool that would insure as large re-
turns from the smaller quantity of exports as could
be obtained outside the pool by a greater quantity
of exports. Yet in the opinion of the timber trade
the Soviets, for the sake of obtaining a still better
tactical position, probably will continue for some
time, perhaps a year, perhaps two, to strain every
nerve to accomplish the extreme limits of the Five-
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? FIGHTING THE RED TRADE MENACE 209
Year Plan for Her timber exports. The bigger the
share of the world market they can seize, the bigger
share they can claim when the time comes to talk of
export quotas.
Meanwhile, in the timber trade the period has
arrived resembling the year 1917 in the World War
when both sides were weary and wishing peace, but
neither side willing to take the first step for fear
of showing weakness.
If there is any lesson to be drawn by the outside
world from this experience of the Swedes and Finns,
one lesson would seem to be that the non-Soviet ex-
porters have little hope of sympathy from the im-
porters. The Swedes and Finns took much pains to
lay their case before the British importers, appealing
to them not to ruin Swedish and Finnish business
and not to forsake old trade friends. But the Brit-
ish, who could become quite excited about the pos-
sibility of Soviet manufactured articles competing
with the British products, showed but faint traces of
interest in the effect of Soviet timber on the Swedish
and Finnish trade.
All this is highly instructive to the student of
Soviet commercial relations with the outside world,
but Americans probably will be more interested in
the developments in the oil business in Sweden, where
two American companies, the Standard and the
Texaco, are keenly concerned. The war on this sector
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? 210 FIGHTING THE RED TRADE MENACE
is, if anything, more ferocious than it has been in
the timber trade. Here conflicting statements render
judgment of the immediate balance of forces dif-
ficult, but the trend toward an ultimate Soviet vic-
tory appears clear and is even partly admitted by
their opponents.
While there is constant talk of the chances of a
great capitalist oil trust coming to some agreement
with the Soviet Oil trust, few persons have realized
how far along toward obtaining and insuring its
share of the world oil market the Soviet Oil Trust
already has gone in the form of regional agreements.
Under such agreements, the Soviet Oil Trust already
has 35 per cent of the German market, 22 per cent
of the English market and, without any agreement,
more than 25 per cent of the Italian market and a
certain 10 per cent, but estimated 15 to 20 per cent,
of the French market, counting the French navy's
imports.
For a concern so rankly outside, this is a fairly
large share of Continental imports, but the Soviet
Oil Trust appears to be only gathering speed. Until
two years ago it virtually ignored the Scandinavian
market. Today it is putting direct sales organiza-
tions into Denmark and Norway and here in Sweden,
through the "Naphtha Syndicate," selling directly,
it has 25 per cent of the market and is holding out
for 40 per cent when and if the Standard, Texaco,
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? FIGHTING THE RED TRADE MENACE 211
Shell and Anglo-Persian are willing to make an
agreement.
While the Soviets' competitors refuse to admit
that the Naphtha Syndicate has more than 15 per
cent of the trade, they grant that the Soviet share
probably will climb to 20 per cent this year. Mean-
while the price war is vicious and admittedly un-
profitable to anybody except the Swedish consum-
ers, who are buying gasoline cheaper than ever in
their history.
In 1926 gasoline here was forty cents a gallon; in
1927, thirty cents; January, 1930, twenty-seven
cents; October, 1930, twenty-two cents; April, 1931,
twenty cents and today with rebates of one kind and
another consumers are getting gasoline as cheap as
fifteen cents a gallon. With a tax of eight cents a
gallon, transport costs of one cent a gallon and
estimated overhead and distributing costs of six cents
a gallon, the price of fifteen cents a gallon would
leave precisely nothing.
Earning nothing, each party at the moment is
waiting for the other to weaken, but the Soviet share
of the market, whether 15 or 25 per cent, is ad-
mittedly growing and an appreciative public is
keeping in touch with the Naphtha Syndicate's prog-
ress through half page advertisements in newspapers
announcing that Soviet oil imports climbed to second
place among all the oil companies the first quarter
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? 212 FIGHTING THE RED TRADE MENACE
of 1931. This touch of American publicity sense, un-
usual in a Soviet enterprise, may have been due to
the fact that the manager of the Soviet Oil Com-
pany here is American; probably the only Amer-
ican employed anywhere in the world is a respon-
sible position in the sales organization of the Soviet
Foreign Trade Monopoly.
Excited as are the Swedish timber exporters over
the purchases by other nations of Soviet exports of
timber, the Swedish public maintains a grateful calm
in the face of Soviet exports of oil to Sweden, and
while Soviet competition in timber has evoked pro-
longed Swedish protests, the only voices audible in
Sweden against Soviet competition in oil are Amer-
ican and British voices. Sweden, it may be recalled,
produces no oil.
Sweden does produce wheat and rye. Not enough
for the whole consumption, but enough to be heavily
affected by the Russian grain if it were permitted to
come unchecked into the country. It is not surpris-
ing, therefore, that now just before the Soviet grain
export season gets under way, Sweden has estab-
lished a state grain and flour monopoly, the "Swedish
Grain Association," for the import and sale of wheat,
rye, grain and flour. On the lines of the Norwegian
system, the Swedish monopoly has the same purpose
to protect domestic growers and to that end has an-
nounced it will buy all the wheat and rye offered by
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? FIGHTING THE RED TRADE MENACE 213
the Swedish producers at prices averaging from
forty to fifty cents a bushel more than the market
price for foreign grain. This is an even greater price
differential than that paid by the Norwegian mo-
nopoly, and the Swedish farmers are happy at the
genuine protection against the Soviet, American and
Canadian competition.
Of any other move directly or indirectly to check
or control the Swedish trade with the Soviet Union
there were no indications discoverable in a short visit.
Sweden has an active trade balance with the Soviet
Union showing about $3,000,000 on the plus side in
1927-1928, nearly $4,000,000 in 1928-1929, and
$7,000,000 in 1929-1930. She sells chiefly cream
separators, boring machines, turbines and saws--the
saws used to cut the timber the Soviet Union now is
exporting at the expense of the Swedish sawmill
owners.
But the men who make the saws are not the same
men who run sawmills, so the record shows that while
the Swedish timber exporters were growing more
vehement in their protests against the Soviet timber,
the Swedish saw manufacturers were selling more
saws with which to cut that timber. In 1927-1928
they sold saws to the value of $650,000; in 1928-
1929, to the value of $700,000, in 1929-1930 to the
value of $1,300,000. Sweden's total exports to the
Soviet Union in 1929-1930, counting the imports
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? 214 FIGHTING THE RED TRADE MENACE
into the Soviet Union by the Swedish concessions
operating there, amounted to nearly $11,000,000
while the total Swedish purchases from the Soviet
Union, chiefly of oil and grain, amounted to about
$4,000,000.
All the Swedish sales to the Soviet Union are
made without a Government guarantee and I was
assured that several of the largest Swedish export
firms carry their own Soviet notes. The average
credit time granted to the Soviet trade representa-
tives here is thirteen months. Those concerns that
wish to discount their Soviet notes will be refused
by the Swedish banks if they wish to discount with-
out recourse. They may, however, discount at the
Soviet Bank here. This Soviet financial practice is
worth attention. For example: A Swedish manufac-
turer sells a bill of goods for $100,000 to the Soviet
commercial representative, who gives a promissory
note for $106,000, payable in thirteen months.
Unable to discount the bill without recourse to
the Swedish Bank, the manufacturer may, however,
take it to the Soviet Bank here and receive for the
bill around $90,000 to $95,000 cash. The Soviets
thus have bought back their own bill at a discount
of 11 to 16 per cent and have in effect merely ob-
tained a rebate of that much for cash payment on
the goods they purchased. Such are the pecularities
of finance, however, that the Soviets find this method
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? FIGHTING THE RED TRADE MENACE 215
gives them more leeway than the payment direct in
cash, as their bank here can borrow from Swedish
sources up to a certain amount to use for discounting
bills. When that sum is exceeded, however, and the
Soviet Bank has no more funds for discounting then
the Swedish manufacturer who wants to discount
without recourse must take his bill to Paris or else-
where, where "black brokers" will favor him with
cash at 27 per cent.
All these other features of Swedish-Soviet com-
mercial relationships, oil, saws, active trade balance,
are important to recollect in judging the great
timber war that dominates the picture. In that war
the Swedish and Finnish timber trade appears to
be losing faith in the effectiveness of the forced labor
issue. They have observed that prices, not pathos,
have decided the business in England, and when the
British Parliament turned down the bill to forbid
the import of products of forced labor, interest in
the "Russian conscripts" flagged. Swedish and Fin-
nish exporters have not entirely abandoned the hope
of affecting the hearts of the British and other con-
sumers, but the attention of the trade now is directed
largely toward the hopes of affecting the pocket-
book of their competitor.
An agreement to divide the market with the Soviet
Union seems the only solution to many who have
seen how difficult it is to keep the Soviet Union out
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? 216 FIGHTING THE RED TRADE MENACE
of the market. Sentiment has been retired to reserve
stations and "sound business sense" brought up to
the front line. With these troops the Soviet forces
are accustomed to deal and signs are not lacking
that the timber war may end in "peace without
victory. "
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? CHAPTER XX
Helsingfors:
On the hotel tables of Helsinf ors stand round green
boxes for the reception of coins. On each box is the
inscription: "Give your bit for gas defense. "
Many builders in Helsingfors and other Finnish
cities have included in the specifications for their
homes and factories gas-proof rooms. The Red Cross
Hospital now being erected here, to be the largest
hospital in Helsingfors, has one gas-proof ward.
Most striking of many manifestations of anxiety
in this country, the agitation for gas defense is only
one evidence of the feeling that Finland's three mil-
lion folk harbor for their huge neighbor on the east,
the land that for a hundred years held Finland sub-
ject and that today, with its 150,000,000 mobilized
behind its Five-Year Plan, seems to Finland much
more than a mere trade menace.
Soviet exports of timber have cut more deeply
into this country's economic life than Soviet exports
of any other commodity have affected any other
country, here much more than in Sweden, yet Fin-
land is not thinking primarily of timber. She is
thinking of gas.
Refore the nation looms a nightmare: On one white
217
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? 218 FIGHTING THE RED TRADE MENACE
night like tonight, when one can read a newspaper
without artificial light at 11 in the evening, a swarm
of Red army airplanes rises from the Leningrad
airdrome, just a step across the Finnish border. High
above the Gulf of Finland fly the Red planes. One
short hour from their base they circle. Below them
sleeps Helsingfors.
Now Helsingfors has been taught that such a
fleet of airplanes could discharge enough gas bombs
at one visit to exterminate the population of a com-
munity much larger than this city of 230,000. On
land the Finnish army believes that it is good enough
to hold back the Red army. In the air the Finns
know that they are virtually helpless, with a maxi-
mum of 300 planes to the Red army's estimated
1,500.
Hence gas masks on hotel tables, gas-proof rooms,
and public agitation to instruct the nation in defense.
It may be fantastic, it may be quite unnecessary, it
may be futile, but whatever justification or lack of
justification there is for this fear, the fear exists.
It is real enough to the Finns to make them spend
money, and one doesn't spend money on measures to
meet a danger one only faintly fears.
Finland, with its recollections of the war of in-
dependence against the Reds just thirteen years ago,
is like a property owner who once suffered a dis-
astrous fire. Finland is taking out fire insurance.
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? FIGHTING THE RED TRADE MENACE 219
And Finland fears fire more than any country could
that has not experienced it. This is the first nation
encountered among nine already visited on this strip
where deep-seated and ever-present apprehension
exists as to what the Five-Year Plan may mean for
its own people.
It is necessary to record these facts to complete
the picture of Europe's attitude toward the Five-
Year Plan. It is equally necessary, however, to put
these facts into perspective and to balance them with
the opinions of many students of the Five-Year
Plan in other countries besides those bordering on
the Soviet Union. Many of these students without
any political purpose to serve and conversant with
the program of the Soviet authorities for the Soviet
Union and with the program of the Communist In-
ternational for a world revolution, do not credit
Moscow with aggressive military intentions today.
To this school of observers belongs the present writer.
Those acquainted with the change in tactics of
the world revolution adopted by Moscow since the
Five-Year Plan went into effect are aware that today
the plan is first to make the Soviet Union strong,
economically independent, militarily powerful and
to elevate, if possible, the standard of living of the
Russian worker to such a level that the proletariat
of Western Europe will find in the existence of the
Soviet system the greatest incentive to emulate it.
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? 220 FIGHTING THE RED TRADE MENACE
When this hypothetical condition arises and the
Communist Party of some European nation seizes
power and the Soviet Union at the same time has be-
come strong, the Russian Communist Party, as every
reader of its proclamations must admit, would be
untrue to its own avowed principles if it did not
promote by every means in its possession the effort
to establish also in other countries a dictatorship of
the proletariat.
First of all, though, the Soviet Union must have
become strong and must have gone considerably
further than it has toward presenting the European
working class with an enviable example of proletarian
comfort. And that, if it is to happen will take time.
So to this school of observers it appears plain that
the Soviet Union now has more reason to wish peace
and more reason to desire stability in the world
markets, where it sells its commodities in order to
achieve the Five-Year Plan, than have any of its
neighbors, lacking such a plan, anxious though they,
too, are for peace and hard-pressed though they,
too, are by the world economic depression.
For to the Soviet Union peace today is a means to
an end. To other nations it is an end in itself. And
if war tomorrow is to be necessary for the sake of
world revolution it can only be successful, accord-
ing to this program, if the Soviet Union today is
permitted the years of peace required to establish
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? FIGHTING THE RED TRADE MENACE 221
its economic independence and to elevate if possible
the standard of living of Soviet workers above that
of their Western neighbors.
This analysis appears to impartial observers to
explain equally well the present comparative qui-
escence of the Communist International, the shifting
of emphasis in Moscow for the moment from the
world revolution to the national constructive effort
of the Five-Year Plan and the obviously genuine
fear of war expressed almost daily by the Kremlin.
But just as Moscow cannot conceive that the bour-
geois world is going to permit the Soviet Union to
attain its strength undisturbed, so Helsingfors can-
not conceive that Moscow wants at this moment
nothing so much as to be let alone.
To all Finns save that 10 per cent of the popula-
tion which voted Communist before the Communist
Party was outlawed, the Five-Year Plan is a very
black cloud on this nation's horizon. The view that
the Five-Year Plan is going to succeed is gaining
ground rapidly here and only a few Finnish leaders
venture to express the hope that it may be true that
when the Five-Year Plan is achieved the Soviet Union
will divert some part of its export to domestic con-
sumption and thus will relieve the world markets of
the excess of Russian products. It was curious to
hear this view advanced by a man prominent in the
anti-Soviet movement.
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? 222 FIGHTING THE RED TRADE MENACE
Most curious, however, was another view outlined
by a leading citizen of Helsingfors who declared that
it was his belief that the breakdown of the Five-Year
Plan would be the worst thing for Finnland, since
Moscow would then seek an outlet for the disappoint-
ment of its people and would send Red hordes across
the Finnish border to loot and plunder.
Thus Finland expresses its fundamental convic-
tion that nothing good can come out of Russia.
Failure or success, the Five-Year Plan is bound to be
bad for Finland.
This anti-Russian feeling, based at least as much
on the resentment at the century of Russian oppres-
sion under the Czars as at apprehension of Soviet
aggression, reaches deep into Finnish hearts. I of-
fered a Finnish girl a cigarette and said the Russian
word for "please. " She rejected it and said: "I had
to study Russian four years when our country was
under Russia and our schools under Russia. I never
want to hear the word Russia again. We hate the Rus-
sians. "
These old historical grievances are enough to war-
rant the assumption that Finland would be on bad
terms with Russia under any Government. But to
them has been added a very real fresh grievance in
the form of the Soviet Union's competition in the
timber market. For Finland this market is much more
important than for Sweden. Of Finland's total ex-
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? FIGHTING THE RED TRADE MENACE 223
ports 85 per cent are wood or things that come from
wood.
The progress of the timber war between the Soviet
"Exportles" on the one hand and the Swedish Wood
Exporters' Association and the Finnish Sawmill
Owner's Association on the other hand, has been told
from Stockholm.
There it appeared that an armistice was in sight
and that an agreement to divide the market with the
' Russians might eventually come. That still appears
a possibility even a probability in Helsingfors, but
not so probable as in Stockholm. For the Finns have
lived for the last hundred years on the principle that
the only way to get along with the Russians is to
fight them. And fighting a price war is the method
recommended by Risto Ryti, governor of the Bank
of Finland, in an address that has had sufficient res-
onance in the timber world to have evoked already
complaints from London that not the Russians, but
the Finns, were upsetting the market by offering
their timber at dumping prices.
Mr. Ryti's speech was a most refreshing docu-
ment after two months' experience of listening to the
plaints and pleas of business men in other parts of
Europe for government protection and international
protection, but above all for protection by somebody
else against Russian dumping. Mr. Ryti's advice
was: "Protect yourselves. Undersell the Russians. "
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? 224 FIGHTING THE RED TRADE MENACE
It was typical of Finland that while European
nations twenty times the size of this tiny land have
quivered before the "Red Trade Menace," it re-
mained for a Finnish banker to launch the slogan,
"Fight," and to get an immediate response. Mr. Ryti
by this speech became a financial Paavo Nurmi. For
without employing the word, Mr. Ryti called, in
substance, for the Finns to use "seesoo," and it is
with "seesoo," that Nurmi wins his races and makes
his records.
This strange word rendered here phonetically was
the object of much curiosity at the Amsterdam
Olympic games, where Nurmi proved again his title
as the greatest runner of all time. Nurmi, it was said,
used "seesoo. " He went into a trance before each
race, contemplated his navel and gained superhuman
strength therefrom. "Seesoo" was conceived to be a
Finnish form of Yogi. "Seesoo," however, it was
explained to me by a Finnish scholar, is simply Fin-
nish for that quality which the English call "intesti-
nal fortitude" and Americans call "guts. " In the
Finnish scholar's terms it is "the unconscious capital
of a man after he has exhausted his conscious re-
sources. " This capital is what Mr. Ryti told the
Finnish saw-mill owners to draw upon.
After analyzing the various reasons why it ap-
peared improbable that the Five-Year Plan could
succeed Mr. Ryti proceeded to make some remarks
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? FIGHTING THE RED TRADE MENACE 225
that undoubtedly should be interesting to other than
Finnish competitors with Soviet exports.
"If we were to assume, however, that the Five-Year
Plan succeeds it would theoretically only be to the
advantage of world economy, for the greater the
production the more complete the satisfaction of
demand for commodities," he said, "and even though
Russia were to continue to export at low prices, world
economy would still theoretically be the gainer. For
why does Russia export? Naturally in order to be
able to import goods and pay for them. "
"So that," continued Mr. Ryti, "if they sell cheaply
and buy dear the result is that Russia must slave
for the benefit of the rest of the world. In practice,
however, the drawback to this system is that those
who export the same commodities as Russia, lose, and
if their economy is brought into disorder, others lose
indirectly by it. We, and in particular our saw-mill
industry, belong to those fated to lose. "
The banker went on to admit that Finland had
greatly increased her timber export by reason of Rus-
sia's decade of absence from the market and said
that the Soviet Union had now attained Russia's
1913 average export and that Finland's had cor-
respondingly declined also to her 1913 average, and
that this was tolerable, but that any more losses would
be intolerable.
"We cannot withdraw from the market. We must
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? 226 FIGHTING THE RED TRADE MENACE
fight for it. But people say that we cannot compete
with Russia owing to the economic methods employed
by that country. We must, however, do so, and we
can do so with hopes of success. Our forests are better
situated, our waterways are better and shorter, our
men and horses are better provisioned, and the skill
and efficiency of our workers are higher than those
of the conscripted workers of Russia.
"Our organization is more elastic and has a greater
sense of responsibility, our saw-mills are more ef-
ficient, our shipping conditions are better and our
freights are lower. We can offer specifications more
satisfactory to buyers and guarantee prompter and
more regular shipments than can Russia.
"Even Russia does not get her timber for noth-
ing, and the deeper they cut the further they must
go for their timber, and even if Russia cared noth-
ing for making profit the fall in the price of timber
comes at a very inconvenient time for her. Its effect
on the success or non-success of the Five-Year Plan
can be great.
"Every fall in timber prices," the banker finished,
"will affect Russia's trade balance and hinder the
realization of the Five-Year Plan. In our case com-
petition for the markets will demand great efforts--
close cooperation between shippers, and temporary
contentment with low forest prices. It demands also,
regrettably enough, the maintenance of wages at
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? FIGHTING THE RED TRADE MENACE 227
levels lower than before. All this, however, is essential
if we are to retain our markets, for if we lose them
we will have to fight hard to get them back. We must
fight to keep them now. "
Mr. Ryti's recommendations were delivered against
a background that made the possibility of their being
carried successfully into operation appear good. After
all one had heard of the terrific slice Russia had taken
out of Finland's export trade it was natural to expect
to see something like destitution in Helsingfors, to
see mobs of unemployed, to observe, in short, a coun-
try flat on its back.
Nothing of the sort. Helsingfors, like all Northern
cities, has an air of asceticism but in a short sojourn
here, I could discover no signs of real poverty, and
I was credibly informed that there are none who
hunger. The so-called "sum" sections consist of houses
much better than those in Berlin's famous model tene-
ment district. And in Helsingfors I saw more new
apartment houses than I have ever seen since Baku,
where the Soviet oil trust covered several square miles
with homes for workers.
The American Legation, commercial attache and
consular officers are housed in a new office building
that "towers" seven stories and justifies its name of
skyscraper by possessing all the finish and equip-
ment of the most up-to-date structures of that type
in America. Its lower floors are occupied by a de-
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? 228 FIGHTING THE RED TRADE MENACE
partment store that would do credit to an American
city three times the size of Helsingfors. One depart-
ment especially is a real cause for civic pride. It is
a book store "The Academic," said to be the third
largest in the world, and with an English section
larger than many good-sized New York book stores.
It has twelve miles of shelf space, stocks volumes
enough to fill a National Library, and is only one
of thousands of book stores in this land of 1 per cent
illiteracy.
Most of the astonishing number of new houses in
Helsingfors were built since the Finns' war of libera-
tion in 1918, and a good many of them were built
on surplus profits earned when Finland was able to
sell timber to the customers Russia used to have and
has now regained. In part these buildings, too, were
erected on some eighty to ninety millions of dollars
in foreign loans, chiefly from American banks that,
to judge by their long term confidence in Finland, do
not take "the Red Menace" here as seriously as do the
Finns.
The Finns belabored the British market with the
argument that if the Britons bought Russian timber
tens of thousands of Finnish lumbermen would join
the jobless. But the Ministry of Social Affairs re-
ports that in April 11,584 unemployed registered
at the labor exchanges, or about one in 300 popula-
tion, and the highest figures quoted of all jobless,
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? FIGHTING THE RED TRADE MENACE 229
registered and unregistered is 60,000, or one in every
fifty of the population.
Soviet competition, however, explain the Finnish
saw-mill owners, resulted in more part-time employ-
ment than in actual dismissals.
The Lappo League, that super-Fascist organiza-
tion named for the first battleground of the war of
independence, virtually has eliminated strikes as it
also eliminated the Communist Party, and now would
like to eliminate trade with Russia. The Govern-
ment was willing to suppress the Communist Party,
but not trade, and another surprise of this investiga-
tion not lacking in surprises was to find that Finland,
bitterest of all the anti-Soviet front, furnishes govern-
mental guarantees for sales to the Soviet Union with
75 per cent insurance in a general scheme of export
credits similar to England's and Germany's.
Finland has an active trade balance with the Soviet
Union and last year sold $6,000,000 worth to her
best disliked neighbor and bought $3,000,000 worth
from her. And Finland, who claimed that Great
Britain was betraying her principles by buying
timber from the Soviet Union, herself bought nearly
$2,000,000 worth last year, and in the first quarter
of this year, $50,000 worth. This, it was explained
to me, was nearly all bought by one man, who has
been severely criticized for doing so.
To most Finns, though, the Russian menace is not
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? 230 FIGHTING THE RED TRADE MENACE
commercial. It is military.
