BRITISH TRADE

Hokitika Guardian, 2 March 1932, Page 5

BRITISH TRADE

A (COSTLY BUSINESS. GERMANY’S DISCOVERY. Trade with the Soviets ia proving a curse to Germany, a leading financier has declared (says the Chicago Tribune). Germany has manufactured and is manufacturing more than 40,000,000 dollars worth of goods 'and machinery for Russia. She financed thc-se deals with short term money borrowed in foreign countries, but she allows her Russian customer two or three years to pay for goods received. Now the foreign creditors want their money back and the German business man is frantically seeking a way out of bis predicament. In its anxiety to get work for Germany’s millions of. jobless, the Government approved the transactions with Russia. I,t guaranteed payment of the greater part of the Russian orders. Vilen Russia decided to buy 240,000,000 dollars’ worth o.f goods from Germany the Reich guaranteed payment of 168,000,000 dollars advanced on Russia’s drafts.

For other deals the Gold Discount Bank discounted 47,780,000 dollars’ worth of Russian drafts. The Reichsbank, through different organisations formed specially for this purpose, discounted another batch of drafts which experts estimate at 100,000,000 dollars. This leaves Germany the bag for Russia to" thO' tune of about 315,000,000 dollars, while Russia was given help in carrying out her five-year plan. Germany believes Russia will pay in due course despite the fact that several prominent ’German firms have been tasked by the Russians if it would not be possible to delay -the dates on which they should pay, American, British, Dutch, and Swiss hanks from which Germany borrowed do not feel so sure about the Russian customer and insist that Germany find means of refunding the millions they loaned her.

A piquant detail in these transactions is that in isime cases agents representing American companies selling machinery to Russia succeeded in inducing German authorities to guarantee Russian payment for thc.se American machines. However, they represent only a very small fraction of the' 315,000,000 del* lars Germany borrowed abroad to finance the Russian deal.

Through the drop in world prices Russia's income is much smaller than in previous years. She is having a hard lime celling her grain, butter, eggs, and oil. hi hoi thinks that Germany, which expects to get millions in gold from her, in the next two or three years, should instead accept a lot of these Russian products. Comrade Piatakow, chief of .the Soviet Supreme Economic Council's plan section, is in Berlin now trying to induce Germany to swap goods with Russia.