98 FIGHTING THE RED TRADE MENACE
year 1930 reveals that during the year the quantity
and value of exports steadily rose, although not so
rapidly as after Belgium and France laid down their
restrictive measures.
year 1930 reveals that during the year the quantity
and value of exports steadily rose, although not so
rapidly as after Belgium and France laid down their
restrictive measures.
Soviet Union - 1931 - Fighting the Red Trade Menace
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? 86 FIGHTING THE RED TRADE MENACE
with the Soviet Union--a disloyalty that Marxists
contend is inseparable from the private capitalist
system.
Bootlegging Soviet grain into Belgium is made
easier by the fact that the canal systems of the two
countries interlace and frequently a Belgian canal
passes for a short distance through Dutch territory.
One spot where this occurs has been exploited heav-
ily by the grain smugglers. Down in the extreme
southern tip of Holland a little tongue of Dutch ter-
ritory runs in between Germany and Belgium.
Through this tongue of Holland runs the Belgian
"Zuid-Willems" canal. It runs from Liege to Ant-
werp and save for the few mileo on Dutch territory
is exclusively Belgian.
In the little strip of Dutch territory through
which the canal passes it touches the Dutch town of
Maastricht. Boats coming up the canal had been long
accustomed to carry wheat from Antwerp to Liege.
After the Belgian Government subjected Soviet
wheat to an import license, Belgian customs author-
ities remarked an extraordinary increase in the canal
traffic from Antwerp to Liege. Dutch importers of
the Soviet grain that had been refused admittance to
Belgium had sold quantities of it to Belgian brokers
and shipped it to Maastricht.
As the Belgian canal boats came through they
were loaded with the contraband wheat and provided
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? FIGHTING THE RED TRADE MENACE 87
with false bills of lading attesting that the grain was
of American or Canadian origin, pursued their dig-
nified way on back into Belgium. In this way many
thousands of tons of Soviet grain have entered the
country. Other thousands, also on false bills of lad-
ing, have been brought on lighters from Rotterdam
into Antwerp. One Antwerp business man told me he
estimated that more Soviet grain had been brought
into the country in this illegal manner than before the
license system was passed.
"It's like trying to dam a river with a fish net;
like trying to sweep the tide back with a broom," he
exclaimed. "There is no use in any one country try-
ing to keep out the cheap products of the Soviet
Union. So long as any nation in the world takes
Soviet goods, those goods will eventually find their
way into all the other nations. How can you identify
Soviet wheat, oats, rye, barley; how can you spot
Soviet timber, coal or oil? It is not as though you
put up a tariff on all grain, timber, coal or oil. That
is easy to enforce. But when you put up restrictions
only against Soviet products, you have to be able to
identify the stuff as coming from the Soviet Union.
How can you do it? We have not been able to find
out. "
He shrugged his shoulders.
As a matter of fact the Belgian Government is now
trying the experiment of requiring importers of
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? 88 FIGHTING THE RED TRADE MENACE
grain from all countries to show samples as well as
produce certificates of origin, and it is hoped that ex-
pert grain men may be able to distinguish the Rus-
sian growths if they continue to be offered under false
bills of lading.
Worth noting is the fact that the smugglers of
Soviet wares are never the Soviet trade representa-
tives but always citizens of the country that has laid
down the restrictions, or of neighboring countries.
So for the last several months there has been a
heavy traffic in Soviet timber through Belgium into
France.
France, it may be remembered, last October in-
cluded timber on its list of Soviet products requiring
special import licenses. But French timber brokers,
operating through Rotterdam agents, buy their
quantities of Soviet timber and, shipping it through
Belgium, send it across the French frontier on false
bills of lading, alleging its origin in Finnland, Swe-
den, Poland, or some other non-Soviet timber pro-
ducing country. The Soviets would not permit this,
for they have refused to send any more transit
through Belgium. Nevertheless the Soviets profit
thereby.
All of the familiar aspects of capitalist inter-
necine contention are present in Belgium to par-
alyze the efforts of the few who believe that Soviet
economic expansion is not a threat merely to the in-
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? FIGHTING THE RED TRADE MENACE 89
dividual producers now feeling the pinch of Soviet
state capitalist competition, but a threat to the en-
tire structure of private capitalism in Europe. So
far, in Belgium as in France, the only capitalists who
react are those immediately hit, and there are al-
ways to be found other capitalists whose profits from
Soviet trade make them active in counteracting the
efforts of their injured countrymen to defend them-
selves.
Flax in Belgium provides a useful example. Rus-
sian flax dominates the world market and under the
Five-Year Plan the Soviet production has already
outstripped the pre-war output. In 1913 Russia
grew 330,000 tons of flax; in 1929, 4-27,700 tons,
out of a total world production of 689,100 tons.
About two-thirds of all the world's flax is grown in
Russia, and last year the Soviet Union exported 71,-
583 tons of it. After Russia come Poland with 67,500
tons annual production, Latvia with 34<,600 tons and
Belgium fourth with 27,400 tons. In Belgium the
flax industry is especially important, for the plant
is not only grown there, but is worked up into linen.
But the Belgian flax industry is sharply divided
between the growers and the weavers. The growers
suffer under Russian competition, the weavers profit
by it. When the Government was considering its im-
port license plan for Soviet products, the flax grow-
ers asked that Russian flax be put on the list. The
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? 90 FIGHTING THE RED TRADE MENACE
weavers demanded that it be kept off the list. It was
kept off, and today even under the bad relations ex-
isting between Belgium and the Soviet Union, exports
of flax into Belgium have increased enormously. In
the first two months this year they amounted to
2,746 tons against 836 tons in the same period the
year before, or an increase of more than 300 per cent.
The Flemish fight the Walloons, they both fight
the Dutch; Belgian industry fights Belgian agricul-
ture while Moscow marks triumphant red the North
Sea sector of the "Anti-Soviet Front. "
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? CHAPTER X
Amsterdam:
Twenty-nine ships carrying Soviet cargoes passed
Antwerp in a huff last October when the Belgian
Government decreed a license law for Soviet imports.
The twenty-nine ships went to Rotterdam instead.
Today the twenty-nine ships have been followed by
307 more.
With wide outstretched arms Holland eagerly has
received the Soviet trade that Belgium denied its
doors and the Netherlands are doing an import busi-
ness from the Soviet Union that for volume and va-
riety is nothing short of phenomenal, and in rela-
tionship to American trade with Holland is most
instructive.
Three hundred and seven steamships carrying
Soviet cargoes have discharged in Holland during
the seven months up to May 1, 1931. Three hundred
and seven merchant vessels can carry a great deal
of goods. So much, in fact, that not only has the
Dutch import from the Soviet Union risen by far
above that of the same period in the previous year,
but it has exceeded the combined Belgian and Dutch
imports from the Soviet Union for the same period
91
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? 92 FIGHTING THE RED TRADE MENACE
in the previous year. If any evidence were needed
that Soviet exports are on the sharp upgrade, it is
offered by an examination of the contents of this Red
armada.
Furthermore, although it is impossible to establish
a causal connection between the decline in American
exports to Holland and the increase in Soviet ex-
ports to Holland, the statistical record of this move-
ment nevertheless is more interesting than statistics
are wont to be.
In blunt terms, the United States lost $5,000,000
worth of exports to Holland and the Soviet Union
gained precisely $5,000,000 worth of exports to
Holland in the three months, January to March,
1931, as compared with the same period in 1930.
American exports to Holland in the first three months
of 1931 were just one-half as much as they were in
the first three months of 1929, and Soviet exports to
Holland in the first three months of 1931 were just
nine times more than in the first three months of
1929.
Wheat, corn, lumber and petroleum are the prin-
cipal products in which the United States competes
with the Soviet Union for the Dutch market.
The movement of trade thus indicated is so ex-
traordinarily violent that it had better be fully
documented. The official figures are:
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? FIGHTING THE RED TRADE MENACE 93
(Last three ciphers omitted)
--In First Three Months of--
1929 1930 1931
Total Dutch imports $250,400 $259,200 $197,600
From U. S 32,400 21,600 16,409
From Soviet Union. . . 800 2,644 7,600
American exports to Holland sank from $32,400,-
000 in the first quarter of 1929 to $16,400,000 in
1931, while Soviet exports to Holland rose from
$800,000 to $7,600,000. America's share of total
Dutch imports sank from 13 per cent in 1929, March
quarter, to 8. 45 per cent in the corresponding quar-
ter this year, while the Soviet Union's share in all
Netherlands imports rose from . 37 per cent in 1929
to nearly 4 per cent in 1931.
If one has no taste for statistics but is skeptical
still of the ability of the Soviet Union to export any
considerable quantities of the copious assortment of
goods observed as for sale in the Soviet pavilion of
the Milan Fair, there could be no more easy and en-
lightening reading than the ships' manifests of the
Soviet armada.
Here on the docks of capacious Dutch ports may
be seen in bulk the items displayed to the public in
the samples in Milan. In bales, blocks, sacks, cases,
tons, standards, barrels, from Archangel, Leningrad,
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? 94 FIGHTING THE RED TRADE MENACE
Kherson, Mariupol, Murmansk, Nicolaieff, Novoros-
sik, Odessa, Poti, Sevastopol, Theodosia and Vladi-
vostock, "a great variety of commodities," as the
official report says, arrived. They came in ships flying
flags of virtually every maritime nation, British and
Italian companies leading and Soviet ships of
"Sovtorgflot" carrying perhaps 40 per cent of the
cargoes. To be quite exact about it, there arrived
goods in more than 200 different categories from
Russia, most of them either not mentioned at all in
the ships' manifests of 1929 and 1930 or appearing
in small volume. The list is much too long to repro-
duce. Alphabetically, it ranges from four cases of
"advertising-printed matter," to fifteen barrels of
"zinc ash. "
Grain men will be interested to observe that in
these first three months of 1931 there entered Hol-
land from the Soviet Union 85,222 tons of barley,
1,920 tons of buckwheat, 18,741 of corn, 58,970 of
oats, 23,799 of rye and 46,117 of wheat.
Rotterdam quotations on wheat as of May 16,
1931 showed Russian wheat selling at only a slight
advantage in price under wheat of similar quality
from other countries, a difference in fact of only five
Dutch cents per hundred weight. Russian rye was
quoted the same day at exactly the same price as rye
from other countries. This bears out the observation
already made that in the grain market the Soviet
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? FIGHTING THE RED TRADE MENACE 95
does not always or often find it necessary to cut prices
more than a shade. Informed circles here are aware
that there is still a stock of surplus grain in Russia.
How much of this stock from the old crop will be
sold depends on the prospects for the new crop. If
the new crop is favorable, it is anticipated the Soviet
Union will come on the market again with fairly large
quantities. If the new crop is unfavorable, the mar-
ket may be spared further Soviet exports of grain
until the actual harvest in the Summer and Autumn
of 1931 has proved the supplies are sufficient both
for the Russian internal consumption and for ex-
port.
But grain is only one set of items worth pausing
before in these ship manifests from Russia. The mani-
fests, it must be recorded, have been made available
in the reports of the American consular service in
Holland--reports on Dutch imports from the Soviet
Union that for comprehensiveness surpass any piece
of official reporting on Soviet trade yet encountered
on this trip.
Here one reads that the Soviets imported into Hol-
land 853 cases of frozen eggs, 157 cases of egg yolks,
although the Soviet foreign trade delegations abroad
have frequently sought to give the impression that
so long as the acute shortage of eggs for the popu-
lation persisted at home, export of eggs would be
eliminated.
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? 96 FIGHTING THE RED TRADE MENACE
Of particular value for the light it throws on the
attitude of the German Dye Trust toward the Soviet
Union is the list of chemicals Holland imported from
Russia. It may be recalled that the German Dye
Trust, Europe's greatest chemical concern, is ad-
verse to trading with the Soviet Union, although in
that respect it differs not only from the official
policy of the German Government but from the gen-
eral attitude of most of the larger German manu-
facturing concerns. Few of these concerns have been
hit by Soviet competition. Here in the ports of Hol-
land one finds the reason for the German Dye Trust's
unwillingness to keep step with its own Government
on the Russian problem.
The infant Soviet chemical industry has sent to
Holland in the first three months of this year 990
sacks of calcined soda, 180 drums of calcium chlo-
ride, 440 drums of calcium carbide, 3,362 drums of
caustic soda, 19 drums of chromic acid, 340 demi-
johns of formic acid, 325 drums of glycerin,
9,528 bags of magnesite and 3,858 tons of sodium
sulphite.
One surprising item of Soviet exports was clothing.
No specifications were given and one was left in the
dark as to what sort of clothing it could have been
or who could have been the prospective wearers, but
at any rate there is the fact--three bales and 1,262
cases of Soviet clothing exported into Holland.
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? FIGHTING THE RED TRADE MENACE 97
Of other manufactured articles there are items in
plenty, although the total volume is not sufficient to
be evidence that any serious export of manufactured
goods has begun from the Soviet Union to this
country. The list nevertheless is long and various.
According to the ships' manifests Holland took from
the Soviet Union in the first quarter of this year
among other things various quantities of aniline
dyes, billiard balls, blankets, brass ware, brushes,
buttons, cables, carpets, celluloid, cotton textiles,
drugs, embroideries, electric light bulbs, lacquered
goods, lampsteads, finished leather, matches, metal-
ware, paint, paper, pencils, porcelain, rubber ga-
loshes, rubber tires, shawls, shoes, silk, window glass,
plywood and telegraph poles.
But what a really large place Soviet wares have
won recently in the Dutch market can best be judged
by the fact that in the period under consideration
Russia contributed more than two-thirds of all the
wheat Holland imported, 93 per cent of all rye, 73
per cent of all oats, 64 per cent of all lumber, 99 per
cent of all pulpwood, 94 per cent of all manganese
and so on down a long list of products including forty
of the more important Dutch imports, of which on the
average Holland took from the Soviet Union more
than 30 per cent of her total acquirements from
abroad.
A similar study of Soviet exports to Holland in the
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?
98 FIGHTING THE RED TRADE MENACE
year 1930 reveals that during the year the quantity
and value of exports steadily rose, although not so
rapidly as after Belgium and France laid down their
restrictive measures. During these months, however,
when the Soviet grain crop was being rushed to the
market, the Rotterdam market had a busy time of it,
as a large part of the total Soviet grain exports went
through that port. Rotterdam grain merchants are
unanimous in their opinion of the quality of the sales-
manship and the mastery of market tactics displayed
by the Soviet foreign trade monopoly.
According to one grain broker, the Russian or-
ganization for the marketing of their grain was
"elaborate, farflung and farsighted. " The Russians
received in their headquarters, he said, from every
important grain center in the world information
covering supplies both on hand and expected from
crops and other sources, as well as on the market
trend, demand and other factors. They not only
gauged correctly the trend of 1930 prices as strongly
downward, helped by their own knowledge of gener-
ally unsuspected Russian supplies, but they maneu-
vered arrivals of their grain in various market cen-
ters, so as to take the utmost advantage of any local
conditions favoring them.
In view of the fact that the Soviet grain exporters
knew the market was going to decline continuously,
they hastened to sell their own grain as fast as pos-
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? FIGHTING THE RED TRADE MENACE 99
sible. It was reported in Rotterdam that a ship often
would be chartered by the Soviets, loaded and dis-
patched on its way with instructions to deliver the
cargo as indicated later. Sometimes the point of des-
tination was not decided until almost at the last
moment. Sometimes on arrival at the designated port,
instructions were received to deliver the cargo at an-
other port. With its hand on the pulse of the market,
the Soviet Foreign Trade Monopoly made the best
of its advantage and Rotterdam is convinced that
even if the Russians were willing to shade prices to
dispose of their stocks, they probably made more out
of the quantities they had to sell than any other na-
tions' traders divided among many competing firms,
could have made out of the same volume of trade.
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? CHAPTER XI
Rotterdam:
It is impossible to get away from superlatives in
dealing with the Soviet Union and here in Rotter-
dam one is compelled to use a timeworn phrase to
record that the largest grain elevator in Europe--
one of the largest in the world--has just been pre-
empted for Soviet grain.
Another monument to the Five-Year Plan in trade,
this huge structure, whose bins had been intended for
wheat from the Dakotas, Manitoba and the Argen-
tine, today embraces in its capacious hold the prod-
ucts of the North Caucasian plains, the Ural steppes,
the Ukrainian fields of Russia.
It is the sort of building that young Soviet poets
choose for subject of their odes and its dimensions
would be spelled in dithyrambs if Demyan Bedny,
Kremlin troubadour, could stand beneath its looming
bulk. Two million bushels of grain can he within its
walls.
All Holland is proud of the "Graansilo" of Rot-
terdam. Its builders, a Dutch "Maatschappij," ad-
mit it is magnificent. It is worthy of pride. It is mag-
nificent, but the wheat growers of America and
Canada may perhaps be pardoned for contemplating
100
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? FIGHTING THE RED TRADE MENACE 101
its contents with less enthusiasm than does "Export
Chleb," the Soviet grain export company that at one
leap in one year has become the greatest single mer-
chant of cereals on earth.
One is irresistibly reminded in the block-long
shadow of the "Graansilo" of the remark the manager
of one of the principal Soviet state farms made last
autumn. He declared soberly and without excitement:
"It is probable that American wheat farmers will be
compelled to confine their production to domestic
consumption, for Russia is the logical granary of
Europe. "
Rotterdam makes the dull term "commerce" ex-
citing. Its crowded ways are populated by ships of
every nation bearing wares from every portion of the
globe. The sirens of the harbor are never still and
the white plumes of its steamers paint romance on
the sky.
For Rotterdam trade is romance. It means the one
thing that has a universal interest for mankind--a
fight. And today Rotterdam is excited at the entrance
of the new contestant in the age-old fight for the
market, at the entrance of the Soviet Union in the
lists of commerce.
"They are doing a big business here, sir," said a
boy on the docks, pointing at a Soviet steamship.
"Oh, yes, the Russkies 'ave got the grain all right,"
remarked a stevedore as he jerked this thumb in the
-
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? 102 FIGHTING THE RED TRADE MENACE
direction of a fleet of 210 great barges anchored side
by side in the Waalhaven.
So great was the inflow of Soviet grain last au-
tumn, and so large the stock still remaining that when
combined with the quantities that came in from other
countries the grain elevators of this fourth largest
port in the world could not accommodate it all and
millions of bushels had to be stored in barges.
Grain receipts totaled as high as 3,600,000 bushels
a week. Rotterdam stocks at the end of the year were
nearly 30,000,000 bushels and even the dock employ-
ees, chauffeurs and newsboys of Rotterdam today dis-
cuss Russian trade with almost as much avidity as they
do football.
It is a huge game for Holland and her traders are
enjoying it. As one very competent observer formu-
lated the attitude here: "Whether Russian imports
are looked upon favorably or condemned, those in
need of any article generally buy it where it can be
had to advantage and with but very few exceptions
do not care whether it originates from Russia or from
any other country in the world provided the com-
modity meets the requirements.
Holland is simply not aware of any "Red trade
menace" any more than Italy is. It only exists here
in the apprehensions of those firms of other countries
which deal in the export of wares competing with
Soviet wares. The Dutch, however, look upon this
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? FIGHTING THE RED TRADE MENACE 103
competition as an excellent opportunity to get bar-
gains, and inasmuch as in this country consumer in-
terest far outbalances producer interest at least in
those articles which the Soviet Union has to offer it
was not surprising that the feeble protest recently
made in the Dutch Parliament against Russian
"dumping" of grain was answered by the Foreign
Minister:
"While Holland is at liberty to raise its tariffs, this
does not mean that it will do so nor will it now fix any
special tariffs against dumping. "
The Dutch attempt at organizing an anti-
dumping, anti-Soviet campaign met a melancholy
end. Its history deserves to be related as an example
of the sort of surrender that often has taken place
when capitalist groups in Europe, at first inveighing
against Soviet trade, are offered definite immediate
profit. The central office of the "Dutch Agrarian
Committee," an organization of more than 400
farmers' cooperatives, last June took a strong line
on the Russian question and published resolutions to
the effect that no patriotic Dutchman should trade
with the Soviet Union, no upright merchant should
lend his hand to aid the Soviets, no right thinking
citizen should become "an accomplice to Soviet
methods," in the words of the resolution.
Nine months later the Dutch Agrarian Committee,
on behalf of its member cooperatives who were in
-
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? 104 FIGHTING THE RED TRADE MENACE
need of barley for fodder, succumbed to the attractive
prices offered by the Soviet trade representative and
purchased a quantity described by the Dutch press
as "considerable. " At one stroke the Soviet trade
representative had disposed of a "considerable" quan-
tity of barley fodder, had silenced forever the pious
protestations of the Dutch Agrarian Committee and
had made it difficult for similar protests to be taken
seriously by Dutch governmental authorities in the
future. Dutch wits had material for their lampoons
and the prestige of the Soviet trade representative
rose.
So far only two important Dutch interests have
been so nearly touched by Soviet competition that a
movement toward reprisal could have been expected.
There are the sugar and petroleum interests. The
very important Dutch Java Corporation, producing
nearly one-sixth of all the world's supply of cane
sugar, possesses thirty of the ninety votes in the In-
ternational Sugar Council organized in Brussels by
Thomas L. Chadbourne. This council was able to
unite in its attempt to limit the export of sugar all
sugar-producing countries in the world with the ex-
ception of the Dominican Republic, Peru and the
Soviet Union.
It is recalled with deep feeling by the Sugar Coun-
cil that at a previous assembly of sugar magnates the
Soviet Union was represented and that at the moment
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? FIGHTING THE RED TRADE MENACE 105
when the comfortable impression had got about that
even the Soviet Union was about to enter the agree-
ment, news reached the Council that the Soviets in
one transaction had disposed of 100,000 tons of sugar
in India at a price and on terms that were declared
to be completely offside. It was asserted that the Rus-
sians had not only sold at a price considerably be-
low the market, but had agreed that if the market
sank still lower before delivery a sum would be ac-
cepted equivalent to the market price on delivery.
The significant fact in this incident is that India
is the bailiwick of the Java sugar producers, is known
as "the Java market. " Dutch sugar interests were
hit hardest by the Soviet's sales in the Java market
but so far the voice of Dutch sugar interests has not
been publicly audible in Holland itself in any serious
protest against the continuance of trade relations
with the Soviet Union.
The reason for this reluctance on the part of the
injured Dutch sugar interests to launch reprisals
against the Soviet Union in the form of a demand for
an embargo or limitation upon Soviet imports into
Holland is the fact that the Sugar Council still hopes
to bring the Soviets into their agreement. In this hope
they are encouraged by the Soviet's generally favor-
able attitude toward attempts at restrictive schemes
for raising world commodity prices.
It is a mistake to believe that the Soviet Union
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? 106 FIGHTING THE RED TRADE MENACE
is in principle or practice against participation in
world pools for the control of commodity prices.
There are only two conditions indispensable for
Soviet cooperation in any such pool. The first is that
the net return in foreign currency to the Soviet
Union from its exports under a control pool shall be
at least as much as the return would have been from
a larger volume of Soviet exports outside such a pool;
second, that no such pool shall impose restrictions as
to the total Soviet production, be it in wheat, sugar,
oil, timber, or what not.
These two conditions made plain by the Soviet
delegates, both at the international negotiations over
sugar and over wheat, point at the same time to the
conclusion that the Soviet Union is only participat-
ing in such international efforts out of the necessities
of the moment and not from any intention perma-
nently to cooperate with the capitalist world.
Temporary cooperation is justified in Soviet's
eyes at the present juncture of Soviet affairs. For
once the principle had been adopted of building up
the Soviet Union and letting the world revolution
take care of itself until the Soviet Union became in-
dependent, the requirements of the Five-Year Plan
had to come ahead of any objections to helping out
the bourgeois world.
The Five-Year Plan peremptorily demands that
imports be kept up to the Plan level; that means that
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? FIGHTING THE RED TRADE MENACE 107
returns from exports must be retained at the Plan
level. The decline of world commodity prices, how-
ever, by forcing the Soviet Union to export up to 50
per cent more than had been planned in order to ob-
tain the planned level of the returns from exports
has hit the Soviet Union harder than it has any other
country, and for this reason the Soviet Union for the
moment has more to gain than any other country by
a world pool agreement that would permit an equal
return in value from a diminished export quantity.
It may be remarked that this would be the atti-
tude equally of any non-Soviet country. But the
Soviet Union's inexorable refusal to accept any
scheme such as that proposed by the Americans at
the London wheat conference, that by limitation of
production might bring about the desired rise in
prices, differentiates the Soviet Union from all bour-
geois countries. Some bourgeois countries have also
protested against the limitation of production, argu-
ing that the trouble in the world markets is not over-
production but faulty distribution and undercon-
sumption. But these countries are open to argument
on the point, are willing for concessions to give in.
Not the Soviet Union.
For the Soviet Union is in a unique position. Un-
der an export quota scheme that would return for a
smaller quantity of exports an amount of money
equivalent to that which would have been obtained
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? 108 FIGHTING THE RED TRADE MENACE
from a larger quantity of exports outside a quota
scheme, the Soviet Union is able to continue to in-
crease production and yet dispose advantageously of
its increased production on the home market.
And the Soviet Union is the only country in a po-
sition to do this, for it is the only country whose in-
ternal market is not saturated.
At the same time by entering into any export
quota system, the Soviet Union encourages the de-
crease of production in all other countries except the
Soviet Union, for the natural effect of an export
quota system restricting the outlet should ultimately
be to reduce the amount produced in a capitalist
country. And this tendency toward a reduction is
encouraged in most capitalist countries by govern-
mental advice to farmers to diversify crops and limit
the area sown to the great staples. While this is going
on in capitalist countries, however, the Soviet Union,
alone among the principal producing nations, not
only does not discourage increased production but
strives with every ounce of energy to raise produc-
tion to ever higher levels. Enabled during the dura-
tion of the quota system to dispose of its increased
production on the home market, but always able to
take it away again from the home market if desir-
able, the Soviet Union is thus in a position at the
expiration of an export quota agreement to appear
upon the world market with a still larger volume of
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? FIGHTING THE RED TRADE MENACE 109
the commodity in question or, in case of a new ex-
port quota agreement, to claim a larger quota by
reason of its larger supplies. But even if the Soviet
internal market were saturated, it is conceivable that
the same policy would be feasible for the Soviet
Union and only for the Soviet Union. For through its
unique state control of national economy the Soviet
Union would be in a position, if necessary, to store
quantities of commodities against the time when, the
export quota having accomplished its effect of reduc-
ing production in bourgeois countries, Soviet reserves
could be released to the market in a volume and at a
price calculated to achieve the desired goal of obtain-
ing permanent control of the market.
That this is the ultimate Soviet goal for many
commodities is not denied by Soviet spokesmen. Cer-
tainly not in the case of wheat, for the assertion too
frequently has been made by the Soviet authorities
that Russia is the natural source of Europe's supply
of bread. It is considerations like these that move
American, British and Dutch petroleum trusts to in-
creasing apprehension over the growth of the Soviet
oil production. So obvious has this apprehension be-
come that a responsible American oil man, occupied
for many profitable years in observation of the inter-
national oil game, told me that in his opinion the
time was not far distant--he named three years--
when Standard, Shell and Anglo-Persian would sink
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? 110 FIGHTING THE RED TRADE MENACE
their differences and approach the Soviet oil trust
with an offer of a very large loan in return for the
privilege of a monopoly on the distribution of Soviet
oil products in the world. Not, be it observed, that
the capitalist oil trusts would combine their re-
sources to inflame public opinion, lay down embar-
goes, choke off Soviet oil, but that the capitalist oil
trusts, that have in part and on occasion tried these
methods and found them wanting, would approach
the Soviets with gifts to purchase by persuasion what
they could not achieve by force. This was the Ameri-
can oil man's considered opinion. "Now," he said, "I
think the Soviets would take such an offer if the loan
were large enough. In three years, perhaps, they
won't. "
Meanwhile, Europe's chief agitator against the
"Bolshevik menace" is Sir Henri Deterding. Sir
Henri's name is used to frighten naughty children in
Soviet Union. Sir Henri does not deny, indeed af-
firms that his efforts have been extensive, intensive
and well financed to organize international public
opinion against the Soviet Union. Yet in Holland
itself, home of Sir Henri's Royal Dutch Shell Com-
pany, where Sir Henri rates as the country's most
influential figure, Sir Henri has not been able to in-
duce even his own Government to impose the faintest
restriction upon Soviet trade.
For one definition of "dumping" is giving much,
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? FIGHTING THE RED TRADE MENACE 111
and asking little, while Holland's traders relate of
themselves
"In matters of commerce the fault of the Dutch
Is in giving too little and asking too much. "
Whatever the rest of the world may say, think or
do about the Soviet Union, the Russians and Dutch
appear for the moment to be pleasantly contented
with each other's commercial policies.
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? 86 FIGHTING THE RED TRADE MENACE
with the Soviet Union--a disloyalty that Marxists
contend is inseparable from the private capitalist
system.
Bootlegging Soviet grain into Belgium is made
easier by the fact that the canal systems of the two
countries interlace and frequently a Belgian canal
passes for a short distance through Dutch territory.
One spot where this occurs has been exploited heav-
ily by the grain smugglers. Down in the extreme
southern tip of Holland a little tongue of Dutch ter-
ritory runs in between Germany and Belgium.
Through this tongue of Holland runs the Belgian
"Zuid-Willems" canal. It runs from Liege to Ant-
werp and save for the few mileo on Dutch territory
is exclusively Belgian.
In the little strip of Dutch territory through
which the canal passes it touches the Dutch town of
Maastricht. Boats coming up the canal had been long
accustomed to carry wheat from Antwerp to Liege.
After the Belgian Government subjected Soviet
wheat to an import license, Belgian customs author-
ities remarked an extraordinary increase in the canal
traffic from Antwerp to Liege. Dutch importers of
the Soviet grain that had been refused admittance to
Belgium had sold quantities of it to Belgian brokers
and shipped it to Maastricht.
As the Belgian canal boats came through they
were loaded with the contraband wheat and provided
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? FIGHTING THE RED TRADE MENACE 87
with false bills of lading attesting that the grain was
of American or Canadian origin, pursued their dig-
nified way on back into Belgium. In this way many
thousands of tons of Soviet grain have entered the
country. Other thousands, also on false bills of lad-
ing, have been brought on lighters from Rotterdam
into Antwerp. One Antwerp business man told me he
estimated that more Soviet grain had been brought
into the country in this illegal manner than before the
license system was passed.
"It's like trying to dam a river with a fish net;
like trying to sweep the tide back with a broom," he
exclaimed. "There is no use in any one country try-
ing to keep out the cheap products of the Soviet
Union. So long as any nation in the world takes
Soviet goods, those goods will eventually find their
way into all the other nations. How can you identify
Soviet wheat, oats, rye, barley; how can you spot
Soviet timber, coal or oil? It is not as though you
put up a tariff on all grain, timber, coal or oil. That
is easy to enforce. But when you put up restrictions
only against Soviet products, you have to be able to
identify the stuff as coming from the Soviet Union.
How can you do it? We have not been able to find
out. "
He shrugged his shoulders.
As a matter of fact the Belgian Government is now
trying the experiment of requiring importers of
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? 88 FIGHTING THE RED TRADE MENACE
grain from all countries to show samples as well as
produce certificates of origin, and it is hoped that ex-
pert grain men may be able to distinguish the Rus-
sian growths if they continue to be offered under false
bills of lading.
Worth noting is the fact that the smugglers of
Soviet wares are never the Soviet trade representa-
tives but always citizens of the country that has laid
down the restrictions, or of neighboring countries.
So for the last several months there has been a
heavy traffic in Soviet timber through Belgium into
France.
France, it may be remembered, last October in-
cluded timber on its list of Soviet products requiring
special import licenses. But French timber brokers,
operating through Rotterdam agents, buy their
quantities of Soviet timber and, shipping it through
Belgium, send it across the French frontier on false
bills of lading, alleging its origin in Finnland, Swe-
den, Poland, or some other non-Soviet timber pro-
ducing country. The Soviets would not permit this,
for they have refused to send any more transit
through Belgium. Nevertheless the Soviets profit
thereby.
All of the familiar aspects of capitalist inter-
necine contention are present in Belgium to par-
alyze the efforts of the few who believe that Soviet
economic expansion is not a threat merely to the in-
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? FIGHTING THE RED TRADE MENACE 89
dividual producers now feeling the pinch of Soviet
state capitalist competition, but a threat to the en-
tire structure of private capitalism in Europe. So
far, in Belgium as in France, the only capitalists who
react are those immediately hit, and there are al-
ways to be found other capitalists whose profits from
Soviet trade make them active in counteracting the
efforts of their injured countrymen to defend them-
selves.
Flax in Belgium provides a useful example. Rus-
sian flax dominates the world market and under the
Five-Year Plan the Soviet production has already
outstripped the pre-war output. In 1913 Russia
grew 330,000 tons of flax; in 1929, 4-27,700 tons,
out of a total world production of 689,100 tons.
About two-thirds of all the world's flax is grown in
Russia, and last year the Soviet Union exported 71,-
583 tons of it. After Russia come Poland with 67,500
tons annual production, Latvia with 34<,600 tons and
Belgium fourth with 27,400 tons. In Belgium the
flax industry is especially important, for the plant
is not only grown there, but is worked up into linen.
But the Belgian flax industry is sharply divided
between the growers and the weavers. The growers
suffer under Russian competition, the weavers profit
by it. When the Government was considering its im-
port license plan for Soviet products, the flax grow-
ers asked that Russian flax be put on the list. The
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? 90 FIGHTING THE RED TRADE MENACE
weavers demanded that it be kept off the list. It was
kept off, and today even under the bad relations ex-
isting between Belgium and the Soviet Union, exports
of flax into Belgium have increased enormously. In
the first two months this year they amounted to
2,746 tons against 836 tons in the same period the
year before, or an increase of more than 300 per cent.
The Flemish fight the Walloons, they both fight
the Dutch; Belgian industry fights Belgian agricul-
ture while Moscow marks triumphant red the North
Sea sector of the "Anti-Soviet Front. "
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? CHAPTER X
Amsterdam:
Twenty-nine ships carrying Soviet cargoes passed
Antwerp in a huff last October when the Belgian
Government decreed a license law for Soviet imports.
The twenty-nine ships went to Rotterdam instead.
Today the twenty-nine ships have been followed by
307 more.
With wide outstretched arms Holland eagerly has
received the Soviet trade that Belgium denied its
doors and the Netherlands are doing an import busi-
ness from the Soviet Union that for volume and va-
riety is nothing short of phenomenal, and in rela-
tionship to American trade with Holland is most
instructive.
Three hundred and seven steamships carrying
Soviet cargoes have discharged in Holland during
the seven months up to May 1, 1931. Three hundred
and seven merchant vessels can carry a great deal
of goods. So much, in fact, that not only has the
Dutch import from the Soviet Union risen by far
above that of the same period in the previous year,
but it has exceeded the combined Belgian and Dutch
imports from the Soviet Union for the same period
91
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? 92 FIGHTING THE RED TRADE MENACE
in the previous year. If any evidence were needed
that Soviet exports are on the sharp upgrade, it is
offered by an examination of the contents of this Red
armada.
Furthermore, although it is impossible to establish
a causal connection between the decline in American
exports to Holland and the increase in Soviet ex-
ports to Holland, the statistical record of this move-
ment nevertheless is more interesting than statistics
are wont to be.
In blunt terms, the United States lost $5,000,000
worth of exports to Holland and the Soviet Union
gained precisely $5,000,000 worth of exports to
Holland in the three months, January to March,
1931, as compared with the same period in 1930.
American exports to Holland in the first three months
of 1931 were just one-half as much as they were in
the first three months of 1929, and Soviet exports to
Holland in the first three months of 1931 were just
nine times more than in the first three months of
1929.
Wheat, corn, lumber and petroleum are the prin-
cipal products in which the United States competes
with the Soviet Union for the Dutch market.
The movement of trade thus indicated is so ex-
traordinarily violent that it had better be fully
documented. The official figures are:
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? FIGHTING THE RED TRADE MENACE 93
(Last three ciphers omitted)
--In First Three Months of--
1929 1930 1931
Total Dutch imports $250,400 $259,200 $197,600
From U. S 32,400 21,600 16,409
From Soviet Union. . . 800 2,644 7,600
American exports to Holland sank from $32,400,-
000 in the first quarter of 1929 to $16,400,000 in
1931, while Soviet exports to Holland rose from
$800,000 to $7,600,000. America's share of total
Dutch imports sank from 13 per cent in 1929, March
quarter, to 8. 45 per cent in the corresponding quar-
ter this year, while the Soviet Union's share in all
Netherlands imports rose from . 37 per cent in 1929
to nearly 4 per cent in 1931.
If one has no taste for statistics but is skeptical
still of the ability of the Soviet Union to export any
considerable quantities of the copious assortment of
goods observed as for sale in the Soviet pavilion of
the Milan Fair, there could be no more easy and en-
lightening reading than the ships' manifests of the
Soviet armada.
Here on the docks of capacious Dutch ports may
be seen in bulk the items displayed to the public in
the samples in Milan. In bales, blocks, sacks, cases,
tons, standards, barrels, from Archangel, Leningrad,
?
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? 94 FIGHTING THE RED TRADE MENACE
Kherson, Mariupol, Murmansk, Nicolaieff, Novoros-
sik, Odessa, Poti, Sevastopol, Theodosia and Vladi-
vostock, "a great variety of commodities," as the
official report says, arrived. They came in ships flying
flags of virtually every maritime nation, British and
Italian companies leading and Soviet ships of
"Sovtorgflot" carrying perhaps 40 per cent of the
cargoes. To be quite exact about it, there arrived
goods in more than 200 different categories from
Russia, most of them either not mentioned at all in
the ships' manifests of 1929 and 1930 or appearing
in small volume. The list is much too long to repro-
duce. Alphabetically, it ranges from four cases of
"advertising-printed matter," to fifteen barrels of
"zinc ash. "
Grain men will be interested to observe that in
these first three months of 1931 there entered Hol-
land from the Soviet Union 85,222 tons of barley,
1,920 tons of buckwheat, 18,741 of corn, 58,970 of
oats, 23,799 of rye and 46,117 of wheat.
Rotterdam quotations on wheat as of May 16,
1931 showed Russian wheat selling at only a slight
advantage in price under wheat of similar quality
from other countries, a difference in fact of only five
Dutch cents per hundred weight. Russian rye was
quoted the same day at exactly the same price as rye
from other countries. This bears out the observation
already made that in the grain market the Soviet
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? FIGHTING THE RED TRADE MENACE 95
does not always or often find it necessary to cut prices
more than a shade. Informed circles here are aware
that there is still a stock of surplus grain in Russia.
How much of this stock from the old crop will be
sold depends on the prospects for the new crop. If
the new crop is favorable, it is anticipated the Soviet
Union will come on the market again with fairly large
quantities. If the new crop is unfavorable, the mar-
ket may be spared further Soviet exports of grain
until the actual harvest in the Summer and Autumn
of 1931 has proved the supplies are sufficient both
for the Russian internal consumption and for ex-
port.
But grain is only one set of items worth pausing
before in these ship manifests from Russia. The mani-
fests, it must be recorded, have been made available
in the reports of the American consular service in
Holland--reports on Dutch imports from the Soviet
Union that for comprehensiveness surpass any piece
of official reporting on Soviet trade yet encountered
on this trip.
Here one reads that the Soviets imported into Hol-
land 853 cases of frozen eggs, 157 cases of egg yolks,
although the Soviet foreign trade delegations abroad
have frequently sought to give the impression that
so long as the acute shortage of eggs for the popu-
lation persisted at home, export of eggs would be
eliminated.
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? 96 FIGHTING THE RED TRADE MENACE
Of particular value for the light it throws on the
attitude of the German Dye Trust toward the Soviet
Union is the list of chemicals Holland imported from
Russia. It may be recalled that the German Dye
Trust, Europe's greatest chemical concern, is ad-
verse to trading with the Soviet Union, although in
that respect it differs not only from the official
policy of the German Government but from the gen-
eral attitude of most of the larger German manu-
facturing concerns. Few of these concerns have been
hit by Soviet competition. Here in the ports of Hol-
land one finds the reason for the German Dye Trust's
unwillingness to keep step with its own Government
on the Russian problem.
The infant Soviet chemical industry has sent to
Holland in the first three months of this year 990
sacks of calcined soda, 180 drums of calcium chlo-
ride, 440 drums of calcium carbide, 3,362 drums of
caustic soda, 19 drums of chromic acid, 340 demi-
johns of formic acid, 325 drums of glycerin,
9,528 bags of magnesite and 3,858 tons of sodium
sulphite.
One surprising item of Soviet exports was clothing.
No specifications were given and one was left in the
dark as to what sort of clothing it could have been
or who could have been the prospective wearers, but
at any rate there is the fact--three bales and 1,262
cases of Soviet clothing exported into Holland.
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? FIGHTING THE RED TRADE MENACE 97
Of other manufactured articles there are items in
plenty, although the total volume is not sufficient to
be evidence that any serious export of manufactured
goods has begun from the Soviet Union to this
country. The list nevertheless is long and various.
According to the ships' manifests Holland took from
the Soviet Union in the first quarter of this year
among other things various quantities of aniline
dyes, billiard balls, blankets, brass ware, brushes,
buttons, cables, carpets, celluloid, cotton textiles,
drugs, embroideries, electric light bulbs, lacquered
goods, lampsteads, finished leather, matches, metal-
ware, paint, paper, pencils, porcelain, rubber ga-
loshes, rubber tires, shawls, shoes, silk, window glass,
plywood and telegraph poles.
But what a really large place Soviet wares have
won recently in the Dutch market can best be judged
by the fact that in the period under consideration
Russia contributed more than two-thirds of all the
wheat Holland imported, 93 per cent of all rye, 73
per cent of all oats, 64 per cent of all lumber, 99 per
cent of all pulpwood, 94 per cent of all manganese
and so on down a long list of products including forty
of the more important Dutch imports, of which on the
average Holland took from the Soviet Union more
than 30 per cent of her total acquirements from
abroad.
A similar study of Soviet exports to Holland in the
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?
98 FIGHTING THE RED TRADE MENACE
year 1930 reveals that during the year the quantity
and value of exports steadily rose, although not so
rapidly as after Belgium and France laid down their
restrictive measures. During these months, however,
when the Soviet grain crop was being rushed to the
market, the Rotterdam market had a busy time of it,
as a large part of the total Soviet grain exports went
through that port. Rotterdam grain merchants are
unanimous in their opinion of the quality of the sales-
manship and the mastery of market tactics displayed
by the Soviet foreign trade monopoly.
According to one grain broker, the Russian or-
ganization for the marketing of their grain was
"elaborate, farflung and farsighted. " The Russians
received in their headquarters, he said, from every
important grain center in the world information
covering supplies both on hand and expected from
crops and other sources, as well as on the market
trend, demand and other factors. They not only
gauged correctly the trend of 1930 prices as strongly
downward, helped by their own knowledge of gener-
ally unsuspected Russian supplies, but they maneu-
vered arrivals of their grain in various market cen-
ters, so as to take the utmost advantage of any local
conditions favoring them.
In view of the fact that the Soviet grain exporters
knew the market was going to decline continuously,
they hastened to sell their own grain as fast as pos-
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? FIGHTING THE RED TRADE MENACE 99
sible. It was reported in Rotterdam that a ship often
would be chartered by the Soviets, loaded and dis-
patched on its way with instructions to deliver the
cargo as indicated later. Sometimes the point of des-
tination was not decided until almost at the last
moment. Sometimes on arrival at the designated port,
instructions were received to deliver the cargo at an-
other port. With its hand on the pulse of the market,
the Soviet Foreign Trade Monopoly made the best
of its advantage and Rotterdam is convinced that
even if the Russians were willing to shade prices to
dispose of their stocks, they probably made more out
of the quantities they had to sell than any other na-
tions' traders divided among many competing firms,
could have made out of the same volume of trade.
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? CHAPTER XI
Rotterdam:
It is impossible to get away from superlatives in
dealing with the Soviet Union and here in Rotter-
dam one is compelled to use a timeworn phrase to
record that the largest grain elevator in Europe--
one of the largest in the world--has just been pre-
empted for Soviet grain.
Another monument to the Five-Year Plan in trade,
this huge structure, whose bins had been intended for
wheat from the Dakotas, Manitoba and the Argen-
tine, today embraces in its capacious hold the prod-
ucts of the North Caucasian plains, the Ural steppes,
the Ukrainian fields of Russia.
It is the sort of building that young Soviet poets
choose for subject of their odes and its dimensions
would be spelled in dithyrambs if Demyan Bedny,
Kremlin troubadour, could stand beneath its looming
bulk. Two million bushels of grain can he within its
walls.
All Holland is proud of the "Graansilo" of Rot-
terdam. Its builders, a Dutch "Maatschappij," ad-
mit it is magnificent. It is worthy of pride. It is mag-
nificent, but the wheat growers of America and
Canada may perhaps be pardoned for contemplating
100
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? FIGHTING THE RED TRADE MENACE 101
its contents with less enthusiasm than does "Export
Chleb," the Soviet grain export company that at one
leap in one year has become the greatest single mer-
chant of cereals on earth.
One is irresistibly reminded in the block-long
shadow of the "Graansilo" of the remark the manager
of one of the principal Soviet state farms made last
autumn. He declared soberly and without excitement:
"It is probable that American wheat farmers will be
compelled to confine their production to domestic
consumption, for Russia is the logical granary of
Europe. "
Rotterdam makes the dull term "commerce" ex-
citing. Its crowded ways are populated by ships of
every nation bearing wares from every portion of the
globe. The sirens of the harbor are never still and
the white plumes of its steamers paint romance on
the sky.
For Rotterdam trade is romance. It means the one
thing that has a universal interest for mankind--a
fight. And today Rotterdam is excited at the entrance
of the new contestant in the age-old fight for the
market, at the entrance of the Soviet Union in the
lists of commerce.
"They are doing a big business here, sir," said a
boy on the docks, pointing at a Soviet steamship.
"Oh, yes, the Russkies 'ave got the grain all right,"
remarked a stevedore as he jerked this thumb in the
-
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? 102 FIGHTING THE RED TRADE MENACE
direction of a fleet of 210 great barges anchored side
by side in the Waalhaven.
So great was the inflow of Soviet grain last au-
tumn, and so large the stock still remaining that when
combined with the quantities that came in from other
countries the grain elevators of this fourth largest
port in the world could not accommodate it all and
millions of bushels had to be stored in barges.
Grain receipts totaled as high as 3,600,000 bushels
a week. Rotterdam stocks at the end of the year were
nearly 30,000,000 bushels and even the dock employ-
ees, chauffeurs and newsboys of Rotterdam today dis-
cuss Russian trade with almost as much avidity as they
do football.
It is a huge game for Holland and her traders are
enjoying it. As one very competent observer formu-
lated the attitude here: "Whether Russian imports
are looked upon favorably or condemned, those in
need of any article generally buy it where it can be
had to advantage and with but very few exceptions
do not care whether it originates from Russia or from
any other country in the world provided the com-
modity meets the requirements.
Holland is simply not aware of any "Red trade
menace" any more than Italy is. It only exists here
in the apprehensions of those firms of other countries
which deal in the export of wares competing with
Soviet wares. The Dutch, however, look upon this
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? FIGHTING THE RED TRADE MENACE 103
competition as an excellent opportunity to get bar-
gains, and inasmuch as in this country consumer in-
terest far outbalances producer interest at least in
those articles which the Soviet Union has to offer it
was not surprising that the feeble protest recently
made in the Dutch Parliament against Russian
"dumping" of grain was answered by the Foreign
Minister:
"While Holland is at liberty to raise its tariffs, this
does not mean that it will do so nor will it now fix any
special tariffs against dumping. "
The Dutch attempt at organizing an anti-
dumping, anti-Soviet campaign met a melancholy
end. Its history deserves to be related as an example
of the sort of surrender that often has taken place
when capitalist groups in Europe, at first inveighing
against Soviet trade, are offered definite immediate
profit. The central office of the "Dutch Agrarian
Committee," an organization of more than 400
farmers' cooperatives, last June took a strong line
on the Russian question and published resolutions to
the effect that no patriotic Dutchman should trade
with the Soviet Union, no upright merchant should
lend his hand to aid the Soviets, no right thinking
citizen should become "an accomplice to Soviet
methods," in the words of the resolution.
Nine months later the Dutch Agrarian Committee,
on behalf of its member cooperatives who were in
-
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? 104 FIGHTING THE RED TRADE MENACE
need of barley for fodder, succumbed to the attractive
prices offered by the Soviet trade representative and
purchased a quantity described by the Dutch press
as "considerable. " At one stroke the Soviet trade
representative had disposed of a "considerable" quan-
tity of barley fodder, had silenced forever the pious
protestations of the Dutch Agrarian Committee and
had made it difficult for similar protests to be taken
seriously by Dutch governmental authorities in the
future. Dutch wits had material for their lampoons
and the prestige of the Soviet trade representative
rose.
So far only two important Dutch interests have
been so nearly touched by Soviet competition that a
movement toward reprisal could have been expected.
There are the sugar and petroleum interests. The
very important Dutch Java Corporation, producing
nearly one-sixth of all the world's supply of cane
sugar, possesses thirty of the ninety votes in the In-
ternational Sugar Council organized in Brussels by
Thomas L. Chadbourne. This council was able to
unite in its attempt to limit the export of sugar all
sugar-producing countries in the world with the ex-
ception of the Dominican Republic, Peru and the
Soviet Union.
It is recalled with deep feeling by the Sugar Coun-
cil that at a previous assembly of sugar magnates the
Soviet Union was represented and that at the moment
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? FIGHTING THE RED TRADE MENACE 105
when the comfortable impression had got about that
even the Soviet Union was about to enter the agree-
ment, news reached the Council that the Soviets in
one transaction had disposed of 100,000 tons of sugar
in India at a price and on terms that were declared
to be completely offside. It was asserted that the Rus-
sians had not only sold at a price considerably be-
low the market, but had agreed that if the market
sank still lower before delivery a sum would be ac-
cepted equivalent to the market price on delivery.
The significant fact in this incident is that India
is the bailiwick of the Java sugar producers, is known
as "the Java market. " Dutch sugar interests were
hit hardest by the Soviet's sales in the Java market
but so far the voice of Dutch sugar interests has not
been publicly audible in Holland itself in any serious
protest against the continuance of trade relations
with the Soviet Union.
The reason for this reluctance on the part of the
injured Dutch sugar interests to launch reprisals
against the Soviet Union in the form of a demand for
an embargo or limitation upon Soviet imports into
Holland is the fact that the Sugar Council still hopes
to bring the Soviets into their agreement. In this hope
they are encouraged by the Soviet's generally favor-
able attitude toward attempts at restrictive schemes
for raising world commodity prices.
It is a mistake to believe that the Soviet Union
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? 106 FIGHTING THE RED TRADE MENACE
is in principle or practice against participation in
world pools for the control of commodity prices.
There are only two conditions indispensable for
Soviet cooperation in any such pool. The first is that
the net return in foreign currency to the Soviet
Union from its exports under a control pool shall be
at least as much as the return would have been from
a larger volume of Soviet exports outside such a pool;
second, that no such pool shall impose restrictions as
to the total Soviet production, be it in wheat, sugar,
oil, timber, or what not.
These two conditions made plain by the Soviet
delegates, both at the international negotiations over
sugar and over wheat, point at the same time to the
conclusion that the Soviet Union is only participat-
ing in such international efforts out of the necessities
of the moment and not from any intention perma-
nently to cooperate with the capitalist world.
Temporary cooperation is justified in Soviet's
eyes at the present juncture of Soviet affairs. For
once the principle had been adopted of building up
the Soviet Union and letting the world revolution
take care of itself until the Soviet Union became in-
dependent, the requirements of the Five-Year Plan
had to come ahead of any objections to helping out
the bourgeois world.
The Five-Year Plan peremptorily demands that
imports be kept up to the Plan level; that means that
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? FIGHTING THE RED TRADE MENACE 107
returns from exports must be retained at the Plan
level. The decline of world commodity prices, how-
ever, by forcing the Soviet Union to export up to 50
per cent more than had been planned in order to ob-
tain the planned level of the returns from exports
has hit the Soviet Union harder than it has any other
country, and for this reason the Soviet Union for the
moment has more to gain than any other country by
a world pool agreement that would permit an equal
return in value from a diminished export quantity.
It may be remarked that this would be the atti-
tude equally of any non-Soviet country. But the
Soviet Union's inexorable refusal to accept any
scheme such as that proposed by the Americans at
the London wheat conference, that by limitation of
production might bring about the desired rise in
prices, differentiates the Soviet Union from all bour-
geois countries. Some bourgeois countries have also
protested against the limitation of production, argu-
ing that the trouble in the world markets is not over-
production but faulty distribution and undercon-
sumption. But these countries are open to argument
on the point, are willing for concessions to give in.
Not the Soviet Union.
For the Soviet Union is in a unique position. Un-
der an export quota scheme that would return for a
smaller quantity of exports an amount of money
equivalent to that which would have been obtained
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? 108 FIGHTING THE RED TRADE MENACE
from a larger quantity of exports outside a quota
scheme, the Soviet Union is able to continue to in-
crease production and yet dispose advantageously of
its increased production on the home market.
And the Soviet Union is the only country in a po-
sition to do this, for it is the only country whose in-
ternal market is not saturated.
At the same time by entering into any export
quota system, the Soviet Union encourages the de-
crease of production in all other countries except the
Soviet Union, for the natural effect of an export
quota system restricting the outlet should ultimately
be to reduce the amount produced in a capitalist
country. And this tendency toward a reduction is
encouraged in most capitalist countries by govern-
mental advice to farmers to diversify crops and limit
the area sown to the great staples. While this is going
on in capitalist countries, however, the Soviet Union,
alone among the principal producing nations, not
only does not discourage increased production but
strives with every ounce of energy to raise produc-
tion to ever higher levels. Enabled during the dura-
tion of the quota system to dispose of its increased
production on the home market, but always able to
take it away again from the home market if desir-
able, the Soviet Union is thus in a position at the
expiration of an export quota agreement to appear
upon the world market with a still larger volume of
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? FIGHTING THE RED TRADE MENACE 109
the commodity in question or, in case of a new ex-
port quota agreement, to claim a larger quota by
reason of its larger supplies. But even if the Soviet
internal market were saturated, it is conceivable that
the same policy would be feasible for the Soviet
Union and only for the Soviet Union. For through its
unique state control of national economy the Soviet
Union would be in a position, if necessary, to store
quantities of commodities against the time when, the
export quota having accomplished its effect of reduc-
ing production in bourgeois countries, Soviet reserves
could be released to the market in a volume and at a
price calculated to achieve the desired goal of obtain-
ing permanent control of the market.
That this is the ultimate Soviet goal for many
commodities is not denied by Soviet spokesmen. Cer-
tainly not in the case of wheat, for the assertion too
frequently has been made by the Soviet authorities
that Russia is the natural source of Europe's supply
of bread. It is considerations like these that move
American, British and Dutch petroleum trusts to in-
creasing apprehension over the growth of the Soviet
oil production. So obvious has this apprehension be-
come that a responsible American oil man, occupied
for many profitable years in observation of the inter-
national oil game, told me that in his opinion the
time was not far distant--he named three years--
when Standard, Shell and Anglo-Persian would sink
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? 110 FIGHTING THE RED TRADE MENACE
their differences and approach the Soviet oil trust
with an offer of a very large loan in return for the
privilege of a monopoly on the distribution of Soviet
oil products in the world. Not, be it observed, that
the capitalist oil trusts would combine their re-
sources to inflame public opinion, lay down embar-
goes, choke off Soviet oil, but that the capitalist oil
trusts, that have in part and on occasion tried these
methods and found them wanting, would approach
the Soviets with gifts to purchase by persuasion what
they could not achieve by force. This was the Ameri-
can oil man's considered opinion. "Now," he said, "I
think the Soviets would take such an offer if the loan
were large enough. In three years, perhaps, they
won't. "
Meanwhile, Europe's chief agitator against the
"Bolshevik menace" is Sir Henri Deterding. Sir
Henri's name is used to frighten naughty children in
Soviet Union. Sir Henri does not deny, indeed af-
firms that his efforts have been extensive, intensive
and well financed to organize international public
opinion against the Soviet Union. Yet in Holland
itself, home of Sir Henri's Royal Dutch Shell Com-
pany, where Sir Henri rates as the country's most
influential figure, Sir Henri has not been able to in-
duce even his own Government to impose the faintest
restriction upon Soviet trade.
For one definition of "dumping" is giving much,
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? FIGHTING THE RED TRADE MENACE 111
and asking little, while Holland's traders relate of
themselves
"In matters of commerce the fault of the Dutch
Is in giving too little and asking too much. "
Whatever the rest of the world may say, think or
do about the Soviet Union, the Russians and Dutch
appear for the moment to be pleasantly contented
with each other's commercial policies.
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