TRADE WITH RUSSIA.

Waikato Times, Volume 100, Issue 16812, 2 June 1926, Page 3

TRADE WITH RUSSIA.

FOREIGN OFFICE REPLY TO BUSINESS MEN. The following letter has been addressed by the Foreign Office to the Secretary of the London Chamber of Commerce on the subject of Angloiiussian trade. “I am directed by Secretary Sir Austen Chamberlain to inform you that ; he has given most careful consideration to the points raised by your President and other speakers of the deputation which waited on the Parliamentary Under-Secretary on January ii last to discuss the Anglo-Soviet situation. The first question raised by Sir James Martin was that of the position of British subjects who had lost their assets in Russia, and who at present seemed to have no prospect of obtaining a settlement of their claims, and yet were compelled to watch the produce of their former undertakings sold freely in this country for the further benefit of the authorities who had originally confiscated such undertakings. As your deputation were inj formed by Mr Lockcr-Lampson, his Majesty's Government have every sympathy .with these unfortunate people. The experience of previous Governments who endeavoured to obtain satisfaction for these claimants leaves no doubt that up to tile present the only possibility of a settlement iias been dircclly conlingcnt on a loan to tlic Government of the Soviet Union guaranlccd by his Majesty’s Government. It is obvious that His Majesty's Government could not provide the capital of such a loan which would in any case have to be raised in the open market. Were, however, Soviet credit to be established to an extent which would enable that Government to float a loan on tlie London market then the l guarantee of his Majesty’s Government would not lie necessary, it is, however I possible that a growing sense of the j economic needs of the Union may in lime help the Soviet Government to realise that, the development of trade depends upon credit, and that Soviet, credit cannot be established in the markets of tiie world until existing liabilities legally inherited arc recognised, and until an honest attempt is made to meet them. His Majesty’s Government have repeatedly stated that they are ready to consider any proposals for a settlement made in good faith which the Soviet Government may think proper to lay before them, but they are not prepared to take any initiative towards fresh negotiations so long as the Soviet Government maintain their present attitude. "With regard to the sale in this country of the produce of former British undertakings which under Soviet law have become the property of the Soviet Government, the Courts of this country have held that where the Soviet Government can prove a good titlo according to Soviet law such title is valid here. • To alter this state of affairs would of necessity involve fresh legislation, which, even if it were carried, could hardly be expected to improve Anglo-Soviet relations and with them Hie chances of a favourable settlement for British claimants, while it would certainly destroy the existing Anglo-Soviet trade, from which au increasing number of British trades arc deriving benefit. "A member of your deputation suggested that the Trade Agreement should he abrogated. The Secretary of State was impressed by the cogent arguments put forward to show how unfairly that Agreement works, and, indeed, the Departments of his Majesty’s Government who have had to work the Agreement had alreadyrealised many of its practical deficiencies; but it must-be remembered not only that the present situation is governed by the Agreement—which was already In existence when the present Government assumed office — but also that any agreement between two States which carry on their foreign trade on two such diametrically opposed principles as private enterprise and State monopoly' must of necessity be both difficult to negotiate and difficult to work. His Majesty’s Government have watched with interest the experiences of other countries, hut so far as can be seen not one of them has yet solved tills problem satisfactorily. It may be true, as was suggested by your deputation, that British interests would have been better served if the Trade Agreement had not been concluded; but it does not follow, and his Majesty’s Govern- j inent do not consider, that they would now bo best served by its abrogation. "Careful consideration has been given to the suggestion made by the deputation that, in order to protect British nationals who are sued by persons of Russian origin in the Courts of this country for debts arising out of their former Russian business and whose assets in that country have been nationalised, it might be possible to declare a moratorium for this class of debt. Such a moratorium could not he declared without legislation, and, though his Majesty’s Government have every sympathy with debtors in this position, the legal difficulties alone arc such as to make Hie necessary legislation very difficult of achievement in any practicable form. In some cases of the kind to which Mr Tweed referred it might be possible to argue that, since the Soviet Government had nationalised the business, they must he considered to have assumed the liabilities ns well as tbc assets, ami Ihat the claim for the recovery of tlm debt lay not, against the British firm,] but against Ihe Soviet Government, | Tim legal validity of ibis argument is, of course, for the Courts to determine." , Reference was recently made to mi above communication in the cubit' news Tbc Chamber of Commerce contending that Hie value, of British trade with Russia was infinites.mnl, compared with the expressed determination of Britain not to countenance repudiation.