THE New Zealand Herald AND DAILY SOUTHERN CROSS. MONDAY, APRIL 5, 1915. TRADE WITH RUSSIA.

New Zealand Herald, Volume LII, Issue 15885, 5 April 1915, Page 4

THE New Zealand Herald AND DAILY SOUTHERN CROSS. MONDAY, APRIL 5, 1915. TRADE WITH RUSSIA.

In most of the important factors that constitute commercial, industrial and social life Russia is the direct antithesis of New Zealand. A great deal of this is due to the huge bulk of the Russian Empire, and to its isolation. Russia has no outlet that is entirely free from ice throughout the year except through the Dardanelles, and Russian trade by this route has been dependent on the permiiion of Turkey. I nder these limitations Russia has developed her trade on lines that make her self-contained to a degree that has had no parallel in any important country in the world since the barriers to trade with China were broken down. The British Empire is at the opposite extreme in this respect. In its international trade it is a striking illustration of the fact that oceans do not separate cc.intries, but join them. New Zealand, for instance, though far distant from the great markets of the world, stands at the very top of the list in her external trade, while Australia and Canada conduct an external trade far ahead of many countries that have access by land to teeming populations. During the month of February last the New Zealand export trade amounted to over £4,000,000, nearly £4 per head of the population- It would take the Russian Empire over four years to condiK't an export trade equal to i!I per head of her population. Yet Russia is a great producing country, generally growing more wheat than any other country, and having an available surplus that far exceeds the output even from Canada and the Argentine. It is true that in 1014 the United States produced and also exported more than Russia, but the American harvest last year was exceptionally good. Russia has a population of J70,000,000, exceeding that of Germany, Frame, Belgium and the United Kingdom put together- Yet during the three years ended with 1012 her exports only averaged £160,000,000, while 1

imports were almost stationary, at £124,000,000. Russia's export trade does not require any attention on the part of Great Britain and her Allies beyond the opening of the Dardanelles to I allow it to take its natural course. | But a tremendous effort is being made to capture the import trade of Russia which hitherto has been almost monopolised by Germany. In 1012 Great Britain bought goods from Russia to the value of £33,500.000, against sales to the extent of only £ 15,000.1100, while Germany bought goods worth £46,000,000, and secured £5-1,000,000 worth of business in exchange, sending nearly half the total imports into Russia. The trade of 1011$ and the first half of 101 was even more favourable to Germany. In the past German trade with Russia has been conducted under favourable conditions owing to the existence of a commercial treaty, but with the declaration of war the treaty auto-

matically came to an end. So far

British efforts to capture Russian 1 trade have been handicapped b\ an I extraordinary fluctuation in the iate j , of exchange. In normal times the | exchange between England and j Russia : s about 06, roubles to £111. or j roughly 2s to the rouble. At present' the exchange is 118 roubles to £10. j The exact result of this is that i whereas formerly a Russian could for J a rouble buy goods to the value of | 2s in England the rouble will now : purchase goods to the value of only , Is 8(1. This position has been | caused by trade influences exactly j the reverse of those which led to the j remarkable fall in exchange with; the United States. There the ex j change is against England, as the tin do balance is in favour of the United States. In the case of Russia the exchange is against that country, as the trade balance is in 1 favour of England. One of the results of the opening of the Darda- 1 nelles will be to rectify this trade i balance, and with it the rate of . exchange. , At present Russia is able to send valuable goods through Sweden and XOl way to England, but this route is too costly for grain and other heavy consignments. The Halt it* Sea is held by the enemy ; the \\ hite. Sea is closed by ice. Railway com-1 munieation does not solve the difli-, culty as nearly all the railways lead 1 to Germany or Austria. The Times, j in a recent issue, estimated the j exportable surplus of Russian wheat i to be worth £52,000.000. When this, is moved the exchange will no j doubt become sufficiently low to j enable Great Britain to push further j trade with her great Ally- Russia's! financial position is beyond question. ] When the war broke out the State 1 Bank had £170,000,000 in gold, and after three months of war this had increase 1 by. a million. Since then this stock has been deereised by the transfer of eight millions to London, in an effort to check the rise of the exchange rate. War loans and increase 1 note issues have been negotiated in Russia without threatening the stability ot the gold stand ard, whereas in Germany the issue of paper money at a rate greatly out of proportion to the available gold reserves has brought the inevitable fall in the value of paper. Great Britain is on the eve of opening up 11 great trade with Russia, in the sale of finished textiles and iron and other metal manufactures, which constitute more than half of the imports into Russia. New Zealand should get an indirect benefit from this, through the increased prosperity and greater purchasing power of our best customer, the Mother Country.