EUROPE AND RUSSIA

Evening Post, Volume CXII, Issue 125, 23 November 1926, Page 15

EUROPE AND RUSSIA

ON WHAT RELATIONSHIP?

ISOLATION VERSUS CO-OPER-ATION

BRITISH CONSERVATIVE OPINIONS.

Not so long ago a party of British Conservative members of Parliament paid a special visit to Russia with the object of learning at first hand what the conditions really are in that distracted country. That the conditions are not all that has been declared by a large circle of detractors is evident from the report made by these Conservative visitors. One of them —Lieut.-Colonel T. C. R. Moore, Conservative M.P. for Ayr Burghs —has written a series of articles in the "Daily Telegraph," giving his impressions of trade and conditions .generally in Russia, the opening one of which is here republished. The British view of Russia is largely dominated by politics. This is a pity. Were politics to be removed, I feel convinced that we should be able to form a more considered and, I think, fairer judgment of the immediate position in Russia. At present there is a sharp cleavage or opinion, and on a broad definition this cleavage may be taken as based on Isolation versus Cooperation. The policy of those who hold the former view is that by keeping Russia outside the comity of nations, by treating her as a pariah amongst nations, we shall force her to renounce her existing form of government, and economic theories, and return to the fold of capitalism, individual enterprise, and constitutional government; whereas the policy of those who favour co-operation is that by initiating a closer' understanding of and sympathy with Russia, we shall so permeate her with our ideals of goodwill, justice, compromise, and fair play that she will renounce of her own free will both the theories and practice of Communism and nationalisation. It would be well, however, in dealing with this complicated problem to remember that, however much the political view may at the moment sway our attitude, due regard should be had for the trade and commercial standpoint. A3 one well-known diplomat remarked to me, the peace and security of Europe will be more adequately ensured and guaranteed by commercial enterprise and co-operation than by political arrangements. And from the result of my inquiries in Germany and Poland, of which I shall proceed to give the gist, this view would appear to obtain agreement in those countries also. Germany, of course, _ though anxious and eager to do j business with Russia, is handicapped in her efforts by lack of capital. The position was briefly and candidly put to me by one German banker as follows:—"Germany believes in Russia's credit, but has not the monoy to back her fancy; England, which has the money, does not believe in her credit." THE GERMAN BANKS. The result, I gathered, was that the German banks obtain our capital and pass it on either in the form of loans or credits, thereby obtaining not alone a balance of interest largely in their favour, but also the advantage to their traders which such credits must necessarily secure. German merchants on the whole, would appear to welcome the possibility of any commercial arrangements between Great Britain and Russia, as they feel there is enough trade to be done with Russia to satisfy the requirements of all European countries concerned, while the definite association of Britain with Russia in a closer commercial agreement would givea commercial stability to the latter which to outside eyes she does not at present possess.

While admitting that up to date those merchants who had carried out contracts with the Russian Government had no cause for complaint, it was pointed out that business with the Soviet Government was still on such an insignificant scale that the necessity for adequate guarantees had not made itself apparent, but all maintained that for business on a big scale some dependable guarantees must be :Taund, and the future stability of such guarantees ensured.

Nearly all the business men I consulted in Berlin were united in,,- their opinion that while until recently the Moscow Government was still deeply committed to State control of industry and other Communistic principles, there had been -lately a very definite and distinct change of policy, and they were satisfied that a welcome would now be given to any capitalistic enterprises from abroad which Would bring foreign money into the country. Whether that change would not be again reserved when such capital had been Secured and commitments undertaken they were not prepared to offer an opinion, but this uncertainty is no doubt due to the accepted difficulties of all trade relationships with Soviet Russia, i.e., their past unwillingness to acknowledge their pre-revolutionary obligations. SOVIET CREDIT. A significant vista was opened up by the statement of one leading German manufacturer to the effect that the Soviet Government would prefer to manufacture an article in their own country rather than import it, even though the cost were ten times as great in doing so. This fact, I think, gives rise to three impressions—one that they are very short of gold for payment of external purchases; another that they are prepared to reduce imports and therefore the standard of living of their people in order to maintain their credit; and the third, that they are apparently prepared to adopt inflation as. a national financial policy, since by no other means can they afford to prolong such a policy. The future effect of this attitude so soon after the introduction of the Chervonetz is most disturbing. Tho Germans generally do not appear to be deeply concerned with the political position or activities of" the Soviet Government. This is probably due to the failure of the 1922 revolution, which has apparently convinced Germany that she has nothing more to fear from Bolshevism, and that that experiment, having failed once, will not be repeated in their country. In Warsaw a rather curious impression emerged frcmi tho general views advanced by those Poles with whom I conversed, and this, I imagine, is the attitude of the official mind as well. It is to the effect that any form of trade relationships with Eussia under the present rogime is impossible owing to the iron control exerted by "the Government over tho individual activities of tho industrial and agricultural producers. That, furthermore, although Poland has all the will in the world to trade with Russia (and naturally,. since the bulk of her trade must lie eastward) and also to enter into any agreement which will facilitate such trade, she cannot, owing to the lnck of response from the Soviet Government. Hence is derived tho view: Russia is only prepared to trade with those countries whose political goodwill she is anxious to obtain, and to that end she will buy from and sell to those countries on an uneconomic basis. As this policy obviously cannot be continued beyond a certain point, the Polish feeling is that the present economic system in

Russia will crash within the next few years, and that then each country will proceed to conduct commercial negotiations with individual Russians over the head or dead body of the present system. As regards the attitude of Poland towards the Soviet Government's politics, I do not think it friendly, but, on the other hand, the prosperity and even the existence of Poland depends so entirely on her commercial progress and stability that I believe she is more than prepared to overlook any differences of opinion on that point in order to come to a satisfactory trade relationship.