The Dominion SATURDAY, NOVEMBER 20, 1920. BRITAIN AND RUSSIA

Dominion, Volume 14, Issue 48, 20 November 1920, Page 8

The Dominion SATURDAY, NOVEMBER 20, 1920. BRITAIN AND RUSSIA

The renewed efiorts the British Government is making to re-cstau-lish trade with Russia will not cs cape" 9 criticißm. What has be considered, however, is that the renowal of trade with Russia is not only esseptial to the economic leconstruction of the world, but will give the people of that , country much improved prospects of overthrowing their Bolshevik tyrants. It certainly need not hinder' the treatment of the question on its merits that the Soviet.-Government recently took occasion to boast that GbnetiaLi 'AVrangel's defeat would "compel the lint'cnJc Powers, especially England, to speedily _ resume trade relations."- Vaptnirings of this lvind may be ignored. Ihe truth, of course, is that British plaits for the resumption of-trade ative thus far'been wrecked by the evasive and provocative tactics of the Soviet Government and some ofits emissaries, and it remains uncertain whether' tno difficulties thus created can be overcome. The practical question raised is whether it is possible to re-establish trade on ~a stable basis_ in spite of the character and policy of the Soviet Government. This,- as ,Sir Robert Hokne observed thy otker day, is tho best way of restoring democratic civilised government in Russia. It is at the "same time indisponsable to complete economic recovery throughout the World. As a market and source of supplies, Russia before the war ranted high amongst the great trading nations. Europe, as Mr, Lloyd George declared not long ago, needs every grain- of lier pre-war export of 4,000,000 tons of grain, and is at a heavy disadvantage for want of the millions of tons of timber, tho scores of thousands of tons of flax and other commodities she exported- annually before the war. 'Until her industries were paralysed by war and'revolution, Russia, in addition to her vast production of timber and grain, was producing 21 per cent, of the world production of petroleum, 30 per cent, of the world production of beet sugaf, and enormous quantities of . other, commodities,' -largely food ai)d. raw materials, of which the world now stands in great neod. At the samo time Bhe offered a wide and everexpanding market for machinery and other manufactures. It is particularly clear, that her isolation not only means want and' stagnation for her own people, but must seriously retard many other nations, Britain amongst the number, in the task of rebuilding their economic life.

While the case for resuming trade with Russia is strong, the difficulties standing in the way cannot be ignored, nor is it to be supposed that these difficulties will disappear when an understanding is reached .with the Soviet Government. Available information goes to show that current production in Russia ii at a low ebb and that transport facilities are in a ruinous state of disorganisation. Whilo a keen demand for manufactured goods is no doubt to be taken for granted, it/ may thus be. anything but easy to establish conditions of exchange. Some uneasiness has recently been awakened in British business , circles by suggestions that the Soviet Government may be permitted to employ its gold reserves' in furtherance of trade. This gold, it is con' tended, ought to be regarded as security for Russia's prc-Revolution foreign debts. In an article in the commercial columns of the London Times it was asserted recently that in the absence of this simple measure of justice trade on a large scale would, be found impossible.

Recognition of debts already contracted (it was added) must, in tha view of tho great mass of business opinion, lie an absolutely prior condition of anytrading relations with Soviet Russia, for otherwise Russia would be able to fritter away her liquid resources in payment of goods she is now in urgent need of, and leave her creditors worse off than ever. What Russia stands most in need of is cfedit, that intangible commodity which llle rulers of Moscow; having destroyed, refuso now to acknowledge as neocssary. But without it important trade relations' with Russia, aro absolutely impossible; Tho half-baked economists of Moscow hnvo. yet to learn the truth of Daniel Webster's remark that "Cr.edit has done more,' a thousand times, to nnrich nations than all the mines of .all tho world." Russia's bursting corn-bins of the Prime Minister's imagination have apparently yet to be filled. At any rate, they liavo not been offered In payment for foreign goods, so that it seems safe to assume they aro non-oxistoni.. But even if no assets other'than gold were available for trading purposes, it would ho foolish to allow this metal to bo sold without- obtaining a recognition of the bonn-fide claims of the existing crcditors.

The. British Government presumably is not unmindful of theso considerations. At all events it is clear from the terms of Me. Lloyd George's announcement that the otfcr to trade with Russia is saddled with conditions and it is not at all likely that' the question of existing debts will be passed over. In its Note to the Soviet Government' in July last on the subject of trade, the British Government insisted that liability in respect of these debts should be admitted, though it did not ask that they should be settled forthwith. The most essential issues connected with the resumption of trade are really dependent, upon the Soviet Government furnishing acceptable guarantees of good faith. Given honest dealing by tho Soviet, tho problenv of establishing a basis of credit need not prove insuperable. A practical step in this direction was mooted some time ago by Krabsin, one of the Soviet emissaries in Britain, when he detailed a list of forest and mining concessions which he said Itussia was prepared to offer for foreign capital. No doubt, under conditions of reasonable socftrity, much mighfc be ac-

complishcd on these lines both in stimulating production and in financing trade. Most important isaiios hinge on the outcome of the present negotiations. Probably even under the somewhat serious limitations that at best must operate for some tim\ the resumption of trade with Russia would in an appreciable degree offset the factors which make at present for trade depression in Britain and other countries.