Feb, 14.
With a flourish of trumpets Germany has announced the signing of a trade pact with Soviet Russia, believed to provide for the re~ ciprocal delivery of goods totalling Reichs~ marks 1,000,000,000, As a pact it may be worth Just as much as any other pact that either Herr Hitler or M, Stalin has signed, as a piece of propaganda it would seem to have considerably more value among the mo credulous, but as a document of any real potentiality it Is open to the gravest doubt. There ave no less than four obstacles in the way of fulfilment of the German dream of being able to depend upon Russia to sup~ ply sufficient goods to offset the Allies economic blockade. The first is purely political, There is the reluctance which Russia, Soviet or not, will always feel to help militaristic Germany dominate Europe. That may not prove very apparent at the moment, but a powerful Germany casting eyes on the undeveloped riches of Russia as she has done in the past, is not likely to be ess ambitious in the future. That Russian reluctance may undergo the temporary aberrations of politicians, though it undoubt~ edly ranks as permanent and unchange~ able interest of Russian policy. The second obstacle is financial. Ordinarily German purchases from Russia would have to be paid for in either gold or foreign exchange, falling which it would have to be in goods. Germany has no surplus available of the raw materials which Russia needs, and it follows that the volume of trade would be governed by the amount of machinery that 'a wat-laden German industry could provide for export. The diMeulty which the German exporters are experiencing in fulfling those export contracts, which are not at present hindered by the blockade, suggests that the volume of such machinery for export would not be large. The fact that the pact appears to provide for German development of Russian resources in no way diminishes the importance of that factor, for whether Germany docs the job, or Russia, the machinery necessary has to be found by the former, and if she is unable to fulfil existing contracts, what earthly chance has she of undertaking and carrying out further commitments of a like nature?
Transport forms a third obstacle. There are three means of transport, firstly, by the Baltic frozen at the Russian end for a part of the year, and in any event its main port is a long distance from most sources of raw materials, secondly by the Black Sea-Danube waterway which in certain circumstances could be cut without any great degree of difficulty, and, thirdly, the railways, of which the most direct is across Poland. Apart from the difference in guages of the various railways involved, a' matter which is not incapable of correction, though it would be a very long job, the fact remains that even if this were done neither Germany nor Russia is possessed of sufficient rolling stock to care for the enormous trafic which this latest act is said to envisage. German railways neglected in past years are well below par, and only under great strain capable of dealing with Germany's present domestic requirements. In Russia there is practically the same thing, and it has been stated authoritatively that even if Russia could afford to set aside one-tenth of her rolling stock for the purpose of serving this new act, and if that one-tenth could be loaded once a month,—a most optimistic view in the light of the long distances involved,—the annual carrying capacity would be less than Germany's peace time imports of iron ore alone. The fourth obstacle concerns the quantities of raw materials available. Without a doubt Russia has of recent years made remarkable strides in the development of her natural resources, and her potential output is enormous, but these are no measure of the extent to which Germany could make good her deficiencies in war by drawing upon Russia, The economic policy of the Soviet has been to render itself independent of foreign supplies as far as possible and to maintain a balance between the production of raw materials and foodstuffs and her domestic requirements, Thus while Russia is one of the leading producers of such as grains, fats, iron ore, manganese, of and other materials, her exports have formed a small and declining proportion of her total production. The fact that Russia has been exporting only sufficient to provide exchange for the purchase of essential raw materials and capital equipment does not mean that she would not be able to export more if her resources were sufflciently developed. That, however takes time, ud, in this instance, that has to be mea sured in terms of years.
The position might be very different if Russia was very anxious actively to assist Germany, but that could only be done mediately on a large scale if she were willing to reduce her own consumption of raw materials and foodstuffs,—in other words to increase Germany's war potential at the expense of her own, Russia is scarcely producing enough foodstuffs for her own puz-Poses, and the standard of nutrition of her population still comparatively low. It is doubtful whether, at the cost of such a sacrifice, Russia would be able to do much to assist Germany. There is most certainly no real inducement to do so, for she would be betraying her own interests in thus increasing the war potential of Germany, whose policies concerning Russia have only been pushed into the background for the moment, and which, it is confidently expected, would be resuscitated in the unlikely eventuality.of Germany emerging successful from the struggle in which she is presently engaged. The fact of the matter is that while there has been considerable expansion of the production of raw materials in Russia, it has not kept pace with growing consumption, and much has yet to be done before she' can strike a permanent and effective balance between the two. Much more has to be done to secure a surplus of production out of which alone Germany can be served, and then only if Germany con put up the cash or the barter for what she wants. It clear that wartime Germany has to devote all her energies to the struggle she has originated. She has decided to serve the god of war and finds it difeult to serve that economics at the same time, and the only conclusion to be drawn from' the available facts is that, no matter how formidable the Pact for Reichsmarks 1,000,000,000 worth of reciprocal trade between the two countries may seem, it has still to be implemented. The making of this agreement is one thing its execution is entirely another.
Text read from the printed page and cleaned; old type leaves the occasional error.