Cr A By Edouard Luboff witha F oreword by The Rt. Hon. Lord Newton, P.C. 38 ASSOCIATION PRICE ONE SHILLING 50 d Soviet Dumping Edouard Luboff by with a foreword by The Rt. Hon. Lord Newton, P.C. This is a summary of the economic war activities and the latest attempts made by the Soviet Government of Russia, against the welfare of the civilised world. Anglo-Russian Press Association 82, VICTORIA STREET LONDON, S.W.1 19%1. 18. Aug. 1934 aE CONTENTS PAGE FOREWORD AN INTERNATIONAL PROBLEM ORGANISED DUMPING - Economic WAR BriTisH TRADE AND RUSSIA SOVIET SLAVERY MoTIvEs BEHIND DUMPING DEFENSIVE MEASURES [oO Zz, { 2 3 24 34 7 FOREWORD by The Rt. Hon. Lord Newton, P.C. ~ Y HEN our Labour Government, at the VV bidding of their more extreme supporters, determined to resume diplomatic relations with the Soviet, it seems probable that they failed to foresee the full consequences of this disastrous folly. They could not possibly have been under any illusions as to the political hostility of the Soviet Government, because, far from practising concealment, the Bolshevik chiefs have never lost an opportunity of expressing their hatred of this country, or of stirring up trouble for us in every part of the world. They have made it perfectly clear in fact that, in a political sense, they regard the British Empire as their most formidable adversary. All this must have been obvious to evervone except to the wilfully obtuse. The Labour Government, however, probably never realised that the Bolshevik political campaign against us would be supplemented by an industrial attack which, if successful, would go far towards undermining our economic position, and Dr. Luboff’s able summary of the facts is an endeavour to awaken the British public to the danger of what is known as *“ Soviet Dumping.” We are proverbially regarded as an unimaginative race, and it is doubtful whether more thana small section realise the tremendous industrial Soviet Dumping power of the Soviet. Soviet Russia is to all intents and purposes a Slave State, but it would perhaps be more explicit to define it as a gigantic internment camp in which approximately 150 million human beings are confined, over whom the Government exercises despotic control and who are rigidly secluded from the rest of the world. The position of these 150 millions is quite different from that of the inhabitants of any other civilised state, as Free Labour does not exist. Every Soviet citizen may now, in virtue of recent legislation, be correctly described as an industrial conscript, unless conscripted for military service. The whole of the nation has in effect been militarised and the Government treats the workers as soldiers, dispatching them to whatever place their labour may be required, quite irrespective of their circumstances, their wishes, or their convenience, and either paying them a minimum wage, or nothing at all. To these must be added a mass of convict labour. Unemployment is now an offence and anything in the nature of a dole has been abolished. (Decree of October gth, 1930. 938) Soviet Government, therefore, enjoys the advantage of an unlimited labour supply combined with immunity from strikes and an almost negligible cost of production, since the workers, if paid at all, receive almost worthless paper money, while factories, mines, forests, lands, have all been acquired by robbery. If, in addition to these advantages, the Soviet Government employs skilled foreign experts, Russian production, both agricultural and industrial, may well attain a development with which no Soviet Dumping other nation will be able to compete and constitute a danger which cannot be ignored. In short, a scientifically directed dumping campaign in Europe would serve the double purpose of disorganising international trade and of stimulating Bolshevism by the promotion of trade disputes and unemployment. Obviously, we are more threatened by this danger than any other country, since we offer a huge market which, owing to our fanatical devotion to Free Trade, is quite defenceless ; nor does it help us much to argue at length as to what does or does not constitute dumping, or as to the precise distinction between slavery and forced labour. The essential fact is that imports both agricultural and industrial, reach us from Russia which are produced under conditions which would not be tolerated elsewhere, and that, in order to carry out the Five Years’ Plan, some of the ordinary necessities of life are sold here at one-tenth of the price which the Russian consumer has to pay in his own country. It might have been anticipated that the British Trade Unionist would have shown some sympathy for the unhappy proletarians who are subjected to a callous tyranny and forced to pay exorbitant prices for such an elementary necessity as food, but hitherto all charges against the methods of the Soviet Government have either been ignored or derided. At the present moment, we are considerably exercised over the question of timber dumping and evidence is continually accumulating with regard to the inhuman conditions under which this trade is carried on, but all attempts to ascertain the truth in Parliament are frustrated 5 Soviet Dumping by Ministers who profess that they are unable to obtain reliable information, although we actually maintain two official commercial representatives at Moscow! Yet if a fraction of the allegations made against Soviet labour conditions had been applied to monarchical states, such as Italy or Spain, British Trade Unionists would in all probability have clamoured unanimously for a rupture of relations with those countries. What, it may well be asked, are we going to do? If the decision rests with our present Government the Free Trade fetish will provide an excuse for avoiding action which would offend their followers, and in that case we shall present the extraordinary spectacle of a great Power complacently permitting our avowed and open enemy to work for our-eventual political and economic downfall. If, however, there should be a change, it will be one of the first and most urgent duties of a new Administration to put a summary end to Soviet Dumping by the most speedy methods available, and to break off, if necessary, those official relations which should never have been renewed. B NEWTON. Soviet Dumping AN INTERNATIONAL PROBLEM r~ AHE problem of Soviet dumping which isnowagitating the international world of business is no new problem. It has been in the background for several years past and has been recognised both by business men and economists as a serious and growing menace. To-day, however, the problem has assumed such proportions that it dominates the economic stage. The Soviets are increasing and intensifying their dumped exports by every means in their power. Larger and larger quantities of every class of goods are being thrown on to the world markets and sold at whatever price they will fetch. And, in consequence, the normal level of world prices is disastrously shaken. Soviet dumping, in fact, threatens to undermine the whole fabric of international commerce and economics, because it disregards and denies the very principles on which it is based. The Soviets deny that there is such a thing as dumping on the part of the US.S.R. and they have marshalled a strong array of arguments to prove the case. The question then that must first be settled is, ©“ What is dumping ? 7 and secondly, “ Can it be applied to presentday Russia? ” The Soviets themselves are ready to reply. They start with the assumption that the real and only definition of dumping is the sale of commodities below the cost of production. On the basis of this they maintain that: “ Under the Socialist order of Soviet economy and under the unique conditions of Soviet foreign trade, Soviet Russia cannot be accused of dumping. The simple calculation of cost of production vis-d-vis price, applicable to capitalist countries, cannot be applied to Soviet Russia, where the State is, both internally and externally. the omnipotent price regulator.” In other words, they urge that since the Soviet Government is in a position to disregard entirely the cost of pro- Soviet Dumping duction, it cannot be said to be dumping. This argument in a variety of forms is brought forward in all seriousness and can be read and heard in every country where Soviet dumping is discussed. But the argument is neither new nor final. To-day we are witnessing dumping by a country whose costs of production may be said to be negative. Indeed, the commodities dumped by the Soviet Government of Russia are either produced by the ““ omnipotent ” State on nationalised land or in confiscated factories, mines and works, or they are obtained from its subjects at fixed prices ‘“ regulated by the State’ and paid for in the State printed currency, which has no purchasing power outside the territories controlled by that State. They are then transported on confiscated railways and on confiscated inland water-ways, and loaded by convict, forced and ill-paid labour. The only real cost, therefore, in addition to the low cost of keeping the workers alive, is the charter of foreign ships, and this is asually paid by the foreign buyer in real foreign currency. But the Soviet definition is not the only one. According to Professor Jacob Viner, in his Memorandum on Dumping, submitted to the * Preparatory Committee for the International Economic Conference” (League of Nations), dumping is a term used by the more careful writers to signify sales for export at lower prices than those charged at the same time and under like circumstances to buyers on the domestic markets. Accepting such a definition, the term dumping can certainly be applied to Soviet exports, since the domestic prices of all export commodities were and are higher than those charged to foreign buyers. Professor Haensel, in his Economic Policy of Soviet Russia, states among other things that “ Cloth has been sent to Mohammerah and sold there at as low a price as 44d. a yard, a. thing unheard-of in the Soviet Union, and greatly to be envied by Soviet citizens.” He also cites granulated sugar, matches, coal and other commodities, while Mr. Graham, President of the Board of Trade, stated in the House of Commons on February 13th, 1930, that “ Russian textile goods are being offered at low prices to British export houses » Soviet Dumping qQ and a certain quantity has come upon the United Kingdom market.” And this admission was made at a time when the Soviet Press itself was devoting much space to the scandal of the high prices charged for textile goods to the Russian people. Furthermore, * textiles * are so scarce in Russia that they have become the most coveted commodity in the Soviet Union and the Government has actually adopted them as the most prized form of bonus for *“ loyal ”* workers. On this important question also we have a frank admission by the Soviet Ambassador in London. In an interview given to the Manchester Guardian (November 21st, 1930), he said : ““ It is the constant aim of our financial and economic policy to make the prices on the internal market in the Soviet Union independent, as far as possible, of the fluctuation of prices on the world market.” He gave no figures to illustrate this independence, but this deficiency has been made good by figures from other sources. Thus Mr. J. Toole, M.P., who visited Moscow in 1930, gave in the Daily Herald, August 28th, the following prices : Butter, 19s. 6d. a lb.; stockings, 35s. a pair; eggs, Is. sach ; apples, 4s. each; chickens, 20s. each. Only two months later the Manchester Guardian (October 13th, 1930), stated that a pair of Russian ducks were sold at zs. a pair at the Ringwood market. Russian butter could be purchased in any of the London and Provincial stores for prices as low as 114d. a 1b. And whilst the price of a cake of soap in Soviet Russia was as high as 8s., Russian soap was sold in London at £20 a ton. Finally, conclusive proof of the widespread nature of Soviet dumping is to be found in the determined action taken against it by a number of European countries and particularly in the declaration made by the International Chamber of Commerce. It should be noted also that such great business men as Sir Felix Schuster and M. Joseph Sacks have emphasised the menace of Soviet dumping both as regard its present dimensions as well as its future possibilities, and have warned the civilised world of the consequences of indifference and lethargy. 1{) Soviet Dumping ORGANISED DUMPING CCEPTING Professor Viner’s definition, then, the Soviets are plainly convicted of dumping since they are selling to the foreigner at a price far below that charged to their own people. Nor is the reason far to seek. The present system of intensified exports at any price has aggravated the state of scarcity at home. The Soviets are therefore committing the unpardonable crime of selling abroad the very goods of which the Russian people are in such desperate need. And this has always been their policy. [t is, indeed, remarkable that during all the years of dearth and famine, considerable quantities of foodstuffs and manufactured commodities have been sent abroad via both the European and Asiatic frontiers. This is well illustrated by the following table : SOVIET EXPORTS Value £. {1 rouble=2/-). 1927/8 1928/9 1929/30! 77,780,000 87,760,000 100,000,000 These figures are of special interest in that they show a steady increase in exports, although it is known that the level of home supplies in almost every commodity was falling. This is confirmed by the following table, which gives the actual figures for the export of those goods of which there was an acute shortage. SOVIET EXPORTS Quantity Tons State on Domestic 1927/8 1928/9 1929/30! Market. 9,100 18,400 50,000 Rationed, 13,000 14,800 32,000 Acute Scarcity 391,200 ITT,000 4,000,000 Rationed 94,000 52,100 50,000 Rationed 32,800 27,700 30,000 Rationed 15,400 16,000 24,000 Unobtainable 16,300 22,200 30,000 Unobtainable .. 133,000 124,400 300,000 Rationed 1 Preliminary estimated figures. Commodity. Matches .. .. Textile materials Cereals vr ms Eggs .. . Butter , Bacon.. .. Poultry .. Sugar .. .. Soviet Dumping 11 These figures show that the greater the shortage at home, the more intensified are Soviet exports; the higher the prices at home, the greater is Soviet dumping abroad. The most intensified form of Soviet dumping began in 1930. In January the Soviets resumed the export of cereals on a large scale and at the same time established a strict system of rationing at home. It is interesting tonote that this resumption of corn exports coincided with the deepest decline in prices and with the most depressed conditions in the world grain trade. Prices had fallen to the lowest level of the last 24 years and the official calculations in all grain-producing countries showed serious losses on nonharvested grain. Yet Soviet Russia chose this moment to launch its dumping campaign and in consequence prices became still further depressed. Fruit and Fruit Pulp Early in 1930 plans were completed for the dumping of fresh and dried fruit and a large variety of canned foods. The canning industry was generously subsidised for dumping ; and many new canning factories were built. All of these have been equipped with the latest machinery and by 1933 it is expected that 200 large units will be operating. The officials in charge of the industry have been given definite orders to ‘‘ catch up and overtake the rate of development in Western Europe.” The dumping of fruit pulp, which was intensified in the summer of 1930, had disastrous effects on British fruit growers. But this preliminary skirmish is apparently to be developed into an attack on all fronts. From reports issued by the Soyusplodoovoshch, the All-Union Fruit and Vegetable Products Association, it is seen that this Soviet Government department has established special factories for fruit pulp, strawberries, raspberries, black currants and apple purée for cider. It is also evident that these factories are subsidised and that their export trade in particular is assisted by “ funds in aid of exports.” 12 Soviet Dumping Timber The dumping of timber is an integral part of Soviet “ international policy ”” and has always been exercised as a political lever against other countries. The plans now provide not only for increased dumping of all kinds of timber, but also for a new dumping campaign of joinery articles and furniture. For this purpose the Soyuzles—the Union Timber and Woodworking department—was established in February, 1930. The department is attached to the Supreme Economic Soviet in Moscow and its statutory capital is 26,500,000 roubles. Among its numerous functions, which include ‘‘ the rationalisation of the working up of timber materials,” is *‘ the drawing up and the executing of timber exporting programmes.” The extent of the development of timber dumping can be gauged by the huge preparations that are being made in the timber industry and the ‘‘ investments *’ that have been allotted to it in the Five Years’ Plan. The amount involved is officially given as 625 million roubles, of which 375 million roubles are being expended on wood-working factories alone. This investment is expected to provide an increase in exports of 31 times that of last year. Furs Soviet dumping of furs, according to Mr. R. E. Groner, who presided at a mass meeting organised by the London Fur Trade Association and the British Fur Trade Alliance, has become “ the gravest menace which has ever threatened the fur trade.” “ Before the war,” Mr. Groner pointed out. ‘‘ Russia produced fully so per cent. of the fur supplies of the world. Moreover, for nearly 10 years after the Revolution, trapping and hunting in most of Russia and Siberia were almost entirely suspended, and the increase in animal life during that period must have been very considerable. The Soviet authorities themselves claimed that the fur-producing potentialities of Russia have scarcely been scratched. In the Five Years’ Plan, fur conservation has received very careful study under the supreme control of the State organisation called the fur syndicate. The whole of Russia and Siberia Soviet Dumping 18 has been divided into sections or tracts, certain of which are periodically closed to all hunting or trapping. Fur farming is being studied as scientifically as in Canada and the U.S.A., and State farms have been established all over the country. * Factories for the dressing and dyeing of furs are being opened in various centres in Russia. The factories are all equipped with the latest type of fur-manipulating machines, and expert supervision of dressing and dyeing processes is provided by Austrian and German workmen, who have been enticed by offers of large salaries. Judging by the success which has already been achieved, there is no doubt that at the end of five years Russia will have obtained a degree of efficiency in dressing and dyeing furs which will place the products of her factories on a level with those of any of the leading dressers and dyers in the world. No one has any right to say that Russia should not develop any branch of her industry, but if the goods so produced, by reason of the under-payment of her workpeople and disregard of productive costs, can be dumped into another country to the detriment of its own industries, then that country should and must safeguard itself. “ Though the quantity of dressed and dyed goods offered through Soviet agents is already creating concern and disorganisation, it is as yet barely 1o per cent. of Soviet Russia’s projected production. There appears to be no standard or basic price either for Russia's raw material or for dressed and dyed skins. Many of the latter are offered below the price of the raw material, and these prices are subject to fluctuations and special allowances such as would cover the cost of import duties into countries protected by tariffs. It is anticipated that Russia will not be content to export her dressed and dyed furs, but as soon as she has established her dressing and dyeing factories she will extend her organisation to embrace the manufacture of fur garments and trimmings. The department responsible for the control of fur dumping is the Pushnoy Syndicate in Moscow. It owns and runs already eight factories for the dressing and dyeing of furs in Kazan, Spask, Sloboda, Astrakhan, Dunilovo-Goritsy and Murashkino, in addition to the so-called Moscow Experimental Works for dressing and dyeing of furs. The Syndicate’s agent in Great Britain is the Fur Department of Arcos Ltd. 14 Coal and Oil The dumping of coal, chiefly anthracite, which began in 1924 has rapidly grown and preparations are now in hand for a much more extensive trade. The exports of coal and anthracite in 1928-9 amounted to 1,149,929 tons or more than twice as much as in the previous year. This coal has been sold on an average at 2s. 3d. a ton less than British coal in France, Italy and America. By taking into account the higher freight charges paid by the Soviet Government, the dumping price difference is in the neighbourhood of 4s. a ton. The arrangements now completed, together with the mechanisation of the coal fields, are expected to bring Russia within the next few years to a place among the foremost coal exporters of the world. The plans provide for an annual output of a minimum of 125 million tons as against 40,600,000 tons in 1928-9. The proposed dumping will at least be trebled by 1932, but it is expected to throw much larger quantities on the world’s markets. As regards oil and its derivatives, dumping has been the trade policy of the Soviets since 1922. Every year increased quantities have been thrown on the markets of the world and, judging by the plans approved in Moscow, this form of dumping is to be intensified. Manufactured Goods It is now evident that in addition to the present dumping of grain, canned goods, fruit, timber and furs, Soviet Russia is about to launch an intensive dumping campaign of Manufactured Commodities and from the data available it is clear that special efforts are to be made to capture British markets. Both the * geographical” and “commodity *’ programmes provide an abundance of evidence to this effect. In other words, the Soviet Government of Russia, according to the latest information available, has resolved to * turn the U.S.S.R from a country exporting raw materials into a country whose export is based chiefly on industry” (Informatsionny Bulleten Exporinykh Organisatsyi, October 20th, 1930). Soviet Dumping Soviet Dumping 15 An official announcement issued by the Supreme Economic Soviet states: “ The Soviet Union is building hundreds of new factories and electric stations; the productivity of labour is being increased by introducing mechanical equipment and new industries, hitherto unknown to Russia. For instance, many branches of the chemical, machine-building, electrical, and automobile industries are being established.” For this purpose special measures have been adopted and have been put into action all over the country. These measures provide for the financing, equipment and running of hundreds of ‘industrial units,” working solely and entirely for export. Markets have been carefully studied, qualified economists and ‘‘ merchandisers” are being trained, and an attack on the world’s markets is being prepared. On the authority of the Supreme Economic Soviet at Moscow, it is stated that a decree ordering the reorganisation and improvement of the exporting apparatus has been issued to the departments concerned both at home and abroad, and that the strictest control is exercised in order to ensure the realisation of all export plans. Instructions have also been issued ordering drastic cuts in the exportation of raw and semi-raw materials and their replacement by manufactured or finished products. Chemicals Much attention is being paid to a series of commodities termed “ Chemicals.” The dumping of these goods is under the control of a group of trusted officials, who manage the department known as Khimexpori. The exports of principal chemicals, which in 1924-8 amounted to 20,000 tons, was increased in the following year to 35,000 tons, whilst the estimates for the current year show a further increase of nearly 10,000 tons. In addition to about twenty items of heavy chemicals already exported, ever-increasing quantities of the products of the Chemico-Pharmaceutical industry are rapidly being added to the dumped total. The industry is controlled by a special department Soviet Dumping established in January 1930, known as Vsekhimprom, under the gis of the Supreme Economic Soviet at Moscow. The statutory capital of the department is 321 million roubles. Its products include basic chemicals, paints and varnishes, aniline dyes, wood distillation and coal-tar derivations. The estimated * investments ”’ in this industry in the fiscal year ending September 30, 1930, are officially given as 343 million roubles, whilst the proposed “ investments ” according to the Five Years’ Plan are in the neighbourhood of 1,500 million roubles. Much emphasis is laid in all official reports on Soviet exports of coal tar, pitch, solvent naphtha, naphthaline, and of “considerable quantities” of paint and varnish. The rapid developments made last year in the dyes industry have enabled the Soviets to begin dumping both sulphureous and nitrogenous dyes. 16 Metal Goods Among the products of the heavy metallurgical industry the immediate export trade already deals with rails, sheet iron, copper products, etc. The plans provide for an extension of this trade and from data available it is obvious that they anticipate large exports of pig iron, blooms, rods, bars, angles, sheet bars of steel, iron and steel castings, plates and sheets, galvanised sheets, tubes and pipes and all classes of railway materials. These plans are subject, of course, to the general plans of the metallurgical industry, where “immense developments ’’ are now in hand. The total output of manufactured metal goods has already risen from 457,000 tons in 1922-3 to 3,873,000 tons in 1928-9. Large sums of money have been and are being allotted to various branches of this industry, for the sole purpose of increasing output which will be dumped abroad. Light Industries The efforts in the basic industries are to be exceeded in the light industries. According to Informaisionny Bulleten, manufactured goods are to be exported on a hitherto Soviet Dumping 17 unheard-of scale. The official journal states that decrees have been issued setting apart a large number of factories and works to produce export goods and it explains : “ By setting apart manufacturing undertakings for the production of export goods only, we are able to concentrate our export production in the largest factories and works which are located in the neighbourhood of ports, and which are provided with a sufficiency of raw materials. These undertakings have been granted special privileges in connection with finance, and have been supplied with the highest qualified technicians and workers, as well as with the best kind of equipment.” Among the undertakings thus set apart are textile mills, rubber factories, match factories, foodstuffs factories, china and glass-ware factories, clothing factories, knitted wear factories, leather and footwear factories, and electric bulb factories. At the same time other decrees provide for the setting apart of sections in the remaining factories, which include machine and tool works, cast-iron works and other factories producing a variety of metal manufactures. The cotton mills produced in 1928-9 about 2,800,000,000 metres of finished goods and the plans provide for doubling this output by the end of 1932. The woollen mills showed an output of 114,994,000 metres of finished goods in 1928-9 and this is to be more than doubled by 1932. The linen mills with an output of 179,000,000 square metres of finished goods are to treble their output. The FiveYears’ Plan provides 1,480 million roubles in subsidies for the textile industry. The rubber industry, with its present output valued at about 200 million roubles at pre-war prices, is to quadruple its output and correspondingly increase its dumping. Rubber footwear and rubber tyres are the two principal articles dumped by Soviet Russia. The match industry is being specially favoured by the Moscow Government in view of its enormous possibilities for dumping and propaganda. The output by the beginning of 1930 has been doubled in comparison with 1913. Millions have already been spent on this industry and the plans show that the Government is heavily subsidising exports to compete against ‘‘ international capitalists.” The export Soviet Dumping in 1929 has been doubled, whilst the present activities, including an advertising campaign and gifts distribution scheme, are expected to quadruple them. Among the foodstuffs, in addition to the fruit and canned goods dealt with in the preceding pages, Soviet Russia is dumping large quantities of sugar, sweets and other confectionery products. The dumping of china and glass-ware has been largely increased within the last two years. The output of both commodities has been doubled since 1926 and large increases are recorded in exports. The other industries, judging by official reports, are making similar efforts and are expected to yield good results. The clothing industry has been granted 100 million roubles in subsidies, the boot and shoe industry 188 million roubles, whilst the dumping plans for soap and pharmaceutical products provide for a subsidv of another roo million roubles. The total subsidies for the light industries are in the neighbourhood of 1,500 million roubles or roughly £150,000,000. All these measures for unprecedented exports have been adopted after a three-years’ dumping test and are co-ordinated with the general Five Years’ Plan, which provides for the entire industrialisation of Soviet Russia. According to this plan, the exports from Soviet Russia will be increased by 1932 to 2,050 million roubles, an increase of more than 1,250 million roubles since 1928. And the bulk of this export trade, ““ will change its character, in that exports of industrial products will assume greater importance at the expense of agricultural exports.” The present share of industrial products in Russia’s export trade is officially given as 60 per cent. and the ‘‘ change” is estimated at another 25 per cent. In these circumstances Russia will be exporting about I,750 million roubles (£175,000,000) worth of manufactured goods a year, as compared with the previous maximum of £13,500,000. It appears, therefore, that as soon as Soviet Russia is completely industrialised and in a position to swamp the European and Overseas markets with manufactured goods, 18 Soviet Dumping 19 we shall witness the beginning of the utter ruin of world Industry. Manufacturers will be unable to compete against the cut Soviet prices, not only on their own domestic markets, but outside them. European and American goods sent to all the free markets of the world will be driven out by the powerful pressure of Russian goods sold at any price. Under such conditions the £175,000,000 worth of exports of manufactured commodities will soon be doubled and trebled, whilst the foreign trade of other countries will diminish proportionately. Dumping in Britain As regards dumping into the United Kingdom, the evidence is overwhelming. During the whole period of trade between the two countries Soviet Russia received from British buyers the large sum of (in round figures) £200,000,000. Nearly all of this was obtained by dumping. According to Soviet official returns, Moscow has managed, since trade between the two countries has been established (1920-9), to dump goods to the value of more than 165,000,000. A great proportion of this huge sum was derived from the export of foodstuffs, although home supplies were falling steadily year by year. Thus dumped wheat accounts for nearly £6,000,000, although|white bread has become such a luxury in Russia that a whole generation has grown up which has never tasted it. § Russian butter is on sale everywhere in Great Britain, but the Soviet citizen is rationed to one gramme of margarine a day. The same thing applies to eggs. More than £4,000,000 worth of Russian eggs have been dumped into this country in spite of the fact that the generous ration for a fully qualified Communist is one-third of an egg a day. And even that can only be secured at an exorbitant price. The same tale could be continued indefinitely. Three million pounds worth of seed were filched from the Russian peasant for dumping in the British Isles. Nearly £3,400,000 worth of Russian bar'zsy went into English beer, sold at cut-throat prices in competition with home and Dominion grown barley. 20 Soviet Dumping Down, feathers, bacon, linen textiles, carpets, vegetable oils, pitch and tar, all were poured into the country in large quantities realising a total figure of £17,422,000. Furs alone fetched £21,198,000, a remarkably high figure in view of the absurd prices quoted. Oil products fetched more than £26,000,000. And, lastly, as if to add insult to injury, there is a total of £2,000,000, representing the sale of Russian chemicals. Yet Russia has always been a buyer of chemicals. The latest figures available for the imports to Great Britain from Soviet Russia show the declared value between January 1st and December 31st, 1930, as £34,245,419. But declared values alone do not illustrate the extent of dumping ; they should be compared with the quantities of goods imported. Detailed statistics for 1930 either from Moscow or London are not yet available but in replies given in the House of Commons on the subject of Anglo-Soviet trade it was stated that wheat imported from Soviet Russia between January 1st and December 31st, totalled 18,853,000 cwt. Considerable increases in the imports of timber, oil, matches, textiles, bacon, poultry and game and a large variety of foodstuffs and manufactures will also be seen as soon as the detailed figures are issued. An examination of prices during the period under review shows that every one of the Soviet commodities were sold at levels fluctuating from between 5 per cent. and 25 per cent. below all other prices. At the same time, the indices of wholesale and retail prices in Soviet Russia, published by the Central Statistical Bureau, show that the price level in Russia itself was fluctuating between 84 and 112 per cent. above the level of world prices. In fact, during the whole period, pages of the official Soviet Press were concerned with the sad plight of the people of the country, owing either to entire absence of goods or to acute shortages, known in Soviet terminology as ‘‘ deficitness.” And no attempt was made to deny the obvious fact that the shortage at home was created and encouraged by the monthly increase in fraudulent exports. Soviet Dumping 71 ECONOMIC WAR Y a decree issued on April 22nd, 1918, at Moscow, all foreign trading throughout Russia was declared a State Monopoly. The Russian merchant, as such, ceased to exist: his place was taken by the Soviet State. And whilst hundreds of other decrees introducing similar Soviet experiments have had to be modified, amended, altered, and even scrapped in the passage of time, the decree of the Foreign Trade Monopoly has withstood all internal and external assaults and is operative to-day in its original form. It is by means of this monopoly that the Soviets are carrying on an economic war against the nations of the world. The following extracts from official reports are translated and are given as the authoritative Soviet definition of the Foreign Trade Monopoly. ‘“ The basis of our foreign trade policy is monopoly. The Socialist order in our State and the strict planning of all our business requires a monopoly of foreign trade . . . the monopoly is also one of the chief weapons for the necessary regulation of the domestic market. . . . ‘‘ The united action prescribed by the monopoly in relation to the foreign capitalist world enables the creation of a powerful and united commercial machinery abroad which, thanks to its power, can obtain in its deals favourable prices and better financial conditions. . . . “ This machinery abroad—the Trading Agencies—acts as a kind of General Staff of the Soviet Government, in whom are concentrated all our mobilised plans for exports and imports. This is not the ordinary trading machinery employed by commercial firms, in which, among other things, are concentrated the secrets of their firms. In our Trade Agencies are to be found all the secrets of the whole Soviet Union. Here are the data of all our export resources, plans of purchases, etc. The Trade Agencies are not commercial organisations in the ordinary sense of the word. They are State departments . . . they represent the interests of the whole Soviet Union in the countries of their 292 Soviet Dumping jomicile. They regulate and control the whole of Soviet trading activity in the given country. They are carrying sut Soviet trade policy abroad. . . . “ Foreign trade is one of the most important links in the structure of Soviet economy. . .. Our Government, having set itself the task of improving and extending Soviet industry to the utmost, pays special attention to forcing our axports which are the basis for our currency fund...” GANETSKY in Sovietskava Tovgovlia. In other words, Soviet trade is entirely in the hands of the Government which operates in foreign countries through trusted agents. These agents, according to the same authority, “ enjoy the privileges of diplomatic immunity and they pay no taxes to the country in which they are stationed.” These agents know all the State secrets and their foremost duty is to force the sale (exports) of Soviet commodities in the countries to which they are appointed. Nothing could be more lucid or more frank. But an even more naive explanation of the purpose of the foreign trade monopoly is given by the Soviet Commissar of Trade, Mikoyan, and his assistant Kaufman. The former states that “ The Foreign Trade Monopoly is a special form of class war between two economic systems that are diametrically opposed—the Soviet and the Capitalist systems. The monopoly is our WEAPON against the rich and powerful ~onntries His assistant is even more bellicose in his explanation. He savs “ The Foreign Trade Monopoly plays the same part in the sphere of foreign economic relations as the Red Army blavs in the sphere of phvsical war.” The aim of the Foreign Trade Monopoly is, therefore, to fight *“ the rich and powerful countries "in a variety of ways and methods. It is true that apologists for and from Russia maintain that the monopoly is designed for the protection of Russian industry from foreign competition. This apology cannot be accepted ; it is obvious that Soviety industry is already sufficiently © protected ’’ by prohibitive tariffs. The Soviet Dumping 28 Soviet Year Book enumerates eleven groups composed of 228 items of commodities subject to heavy import duties when conveyed to the U.S.S.R. via European frontiers, seventeen items of commodities conveyed through ports of the Pacific and overland, sixty-six items of commodities conveyed through the port of Murmansk and twenty-eight items of commodities conveyed through Asiatic frontiers. The existing tariffs average 334 per cent. ad valorem, but in many cases (even when it is obvious that protection has not been the real objective) the tariffs are absolutely prohibitive. For instance, knitted goods such as stockings and socks pay a duty of £6 10s. a Ib., and straw or textile hats pay £5 a Ib., whilst women’s hats are subject to a duty of £10 a Ib. Boots and shoes pay a duty of £1 10s. a Ib. and double this amount for fancy grades. Toilet soaps are taxed at 7s. 6d. a lb., whilst general toilet preparations pay at the rate of £8 15s. a lb. Among industrial commodities, pig iron castings pay a tax of 24s. a cwt,, nails £3 a cwt., and wire netting £25 a cwt. General machinery is taxed at £11 a cwt.. whilst typewriters pay a tax of 15s. a lb. These few examples are enough to show that there is no need for the Foreign Trade Monopoly to protect Russian industry. (They also show, en passant, the impossibility of normal trade with Russia.) The plea that the monopoly as such protects Russia from foreign competition as regards imports is thus seen to be absolutely false. Examining the same plea in connection with exports, since it is put forward in all seriousness, it is found equally false. The argument advanced is that: “The Capitalists used to trade freely in our country, buying our produce and products. and they made huge profits by it.” The monopoly has, it is true, eliminated the capitalist in Russia, but Russian produce and products are sent abroad and dumped regardless of price by the monopoly. In consequence, the Foreign Trade Monopoly fails hopelessly to function in the interests of the Russian peoples : it neither Soviet Dumping protects the home consumer nor does it protect the Russian producer from exploitation. But its enormous success is evident in the political sphere. At home, by concentrating all the resources of the country in the hands of a small group of dictators, the Soviets are destroying every chance of successful opposition to their regime. Abroad the monopoly hasbeen used very successfully for the prevention of ‘ capitalist stabilisation.” Every attempt at trade revival has been counteracted by the Soviets by acts which were intended to prolong depression. Thus the present intensified dumping campaign was cleverly timed for a moment when both the British Empire and the United States of America were making concentrated efforts to revive trade from an unprecedented state of depression. Stalin is not only clever : he is well informed. He knows that by throwing fairly large quantities of goods on to a depressed market and offering these at any price, the depression is deepened immediately and efforts of recovery are made much more difficult and complicated. Dumping enables him at one stroke to reduce the meagre ration of the Russian worker to starvation point and to play with and manipulate the food and commodity markets of the world. By the first he reduces a people to cowed submission ; by the second he creates that condition of instability which he hopes may lead to world revolution. 24 Soviet Dumping rq ] BRITISH TT "DE AND RUSSIA [EWING the luxurious offices and warehouses of Soviet trading departments in Britain (and elsewhere), the impression is gained that large sums of Soviet money are employed in these activities. Nothing is further from the truth. These large departments are run mainly on British money. An investigation made some time ago into the methods by which Soviet trade is financed in Britain, disclosed the fact that Soviet turnover capital “ used in the British section of Soviet foreign trade ”’ amounted to about £3,000,000. More interesting still was the fact that at the time of the investigation Soviet exports to this country were financed by English banks to the extent of one quarter of the total value, a further quarter was obtained as advances from brokers, and a third of the remainder was derived from ‘ other British sources.” This shows that Moscow manages to extract at least 66 per cent. of the value of goods ultimately dumped in this country long before they reach these shores. In the total trade turnover between Moscow and London the amount employed was shown as exceeding £8,000,000, of which “ England provided 62 to 63 per cent.” This amount was turned over six times a year. Since the latest resumption of relations between the two countries in 1929, both the amount of credit and advances has increased ; the export credit scheme alone provided £4,000,000 to £5,000,000 worth of credits during a few months. And as credits increase, so the Soviet share in the financing of their own trade diminishes. It is thus seen that with little or no outlay of Soviet money, Moscow has been able to create a huge business under the protection of English law and endowed with special privileges, by means of 26 Soviet Dumping which she has amassed enormous surpluses year after year. By comparing the figures of direct trade only, it appears that the excess of imports from Soviet Russia over British exports to Soviet Russia in the period 1924-30 amounted to £138,769,000. This figure is derived by adding to the figures given in a Board of Trade reply in the House of Commons on December 8th, 1930, the difference between imports and exports for 1930 from Board of Trade returns. The figures are as follows : EXCESS OF IMPORTS OVER EXPORTS 1924 1925 1926 1927 1928 1929 [930 £oo0 [5,913 19,082 18,272 16,543 18,860 22,744 27,455 It should also be noted that a considerable proportion of the goods that the Soviets export to this country is resold to other countries by Soviet Agents working in competition with British firms. Thus, whilst the amount actually recovered by the Soviets cannot be placed to the credit of the British side of the trade exchange, the profits made on the deals are lost to British traders and thus to the nation generally. The inequality of benefit resulting from trade relations with the Soviets is further emphasised by comparing the figures with those showing the general trend of foreign trade between Britain and her overseas customers. Whilst the tendency of all foreign countries is to spend a fair percentage of the value of their goods retained in the U.K. on British produce and manufactures, Russia alone of all countries spends as little as possible. The following table illustrates the position for the year 928: Ratio of Exports of British Produce and Manufactures to Imports retained in the U.K. in 1928. Figures from Board of Trade returns. Percentage decimals omitted. Soviet Dumping SOVIET RUSSIA Finland .. Esthonia .. Latvia .. Lithuania Sweden .. Norway .. Denmark... Poland .. Germany .. Netherlands Belgium .. France .. Switzerland Spain ve Italy A. Czechoslovakia .. Egypt .. - Persia os .e S.A... od Central America... 3 F060 - 3 56 64 27 These figures are illuminating. A review of the last eight years shows that whilst for every £ of imports retained in the U.K. the world spent on an average 10s. 6d. on British produce and manufactures, Soviet Russia, for the same period, in spite of her great need, has spent less than 3s. As regards the Empire, a simple computation shows that the ratio of Exports of British Produce and Manufactures to Empire Imports retained in the U.K. during the last eight years was 112%. In other words not only did the Empire countries spend on British manufactures every penny obtained from their sales in Britain, but they actually added 2s. 4d. in the £ obtained elsewhere. To the Empire countries must be added a number of foreign countries who have spent more than they actually obtained in the process of direct trade. They are : Portugal, Austria, Hungary, Yugo-Slavia, Bulgaria, Roumania. Turkey, Iraq, China and Japan. 28 Soviet Dumping Yet Soviet Russia, of whose orders there is so much talk and to whom export credit facilities have been accorded with great ease, has managed during the last two years to transfer elsewhere 83 per cent. of the value of the goods she sold to Britain. Under such circumstances the advantages resulting to this country from the extension of Anglo-Soviet trade seem to be entirely mythical. Everything goes to show that the trading facilities granted to the Soviets are a boon to Moscow and show little, if any, advantage to Britain. Undoubtedly a few merchants and a few industrial concerns have managed to make a profit by dealing with the Soviets, but on balance the national losses are overwhelming. Moreover the huge surplus accruing to the Soviets was obtained with little capital investment or outlay. The goods sold are known to be derived from confiscated properties for which so far no compensation has been paid, and from the peasant producer at low fixed prices paid in a paper currency of an ever-falling purchasing value. Soviet Dumping 39 SOVIET SLAVERY UMPING presupposes some form of cheap labour, D In this respect the Sovietshave been very successful; not only are their labour costs extremely low, but they are employing ordinary labour under a variety of forms of compulsion and are making extensive use of prison labour. This form of forced labour differs little from that of serfdom or slavery. Low labour costs are general throughout Soviet Russia. Wages paid in the paper currency have a nominal value, but their real value is at best only one third of the nominal value. The average wage for industrial workers throughout the country is officially given as seventy-seven roubles a month. But it is useless to translate these roubles into shillings by accepting the nominal value of a rouble as two shillings, since no one in Russia, and not even the Soviet Government itself, would claim that the real average wage of the industrial workers averages 154s. a month or 38s. 6d. a week. This nominal wage, however, is easily translated into purchasing power and this shows that after making every possible allowance (on a very generous scale) the real value of the average weekly wage of the town worker in Soviet Russia amounts to only 11s. 3d. a week. In the allowances made the official *“ budgetary workers’ rations’ have been increased by 25 per cent. and the purchases in the “ private sector ”’ (private shops) have been reduced to a minimum. Compared therefore with the level of British wages and even of unemployment relief (dole) Russian wages are ridiculously low and, measured by the same standard, they can safely be described as sweated.” It was undoubtedly afteractualobservation of the results of these low wages that Mr. J. Toole, Labour Member of Parliament for South Salford, stated in the Dazly Herald {August 28th, 1930): 20 Soviet Dumping ‘I declare, without fear of contradiction, that the average unemployed man in England, with a wife and three children, who is in receipt of unemployment pay, is better off than the average emploved Russian worker.’ This, as a sincere expression of opinion, from a Socialist source, is eloquent tribute to the higher standard of living provided by a capitalist State when compared with those obtaining in the Soviet State. At the same time it proves that labour costs in Soviet Russia are exceedingly low and that this enables the Soviets to disregard the factor of cost of production when dumping goods abroad. Attention must also be drawn to the fact that what is represented officially as the average wage, is in reality the average of earmimgs; these include overtime in many industries. The official seventy-seven roubles is therefore the average earnings of industrial workers only and cannot be held to apply to the earnings of agricultural workers. If we calculate the official returns of all average earnings, i.e. by including the forty-two and forty-three roubles a month earned by agricultural workers, it is safe to say roughly that the average monthly earnings of all classes in Russia are not more than about forty-five or forty-six roubles a month. For it should be noted that against some 5,000,000 industrial workers there are in Soviet Russia some 50,000,000 agricultural workers. Under these circumstances it is not surprising to read in official Soviet publications that the average diet of the average worker consists mainly of potatoes and black bread. This meagre and monotonous menu is eked out with about two Ibs. of meat and three-quarters of a lb. of fish a month. Forced Labour The Soviet system as a whole rests on the principle of compulsory labour. This was repeatedly emphasised by Karl Marx, Engels, Lenin, Trotsky and Stalin. The latest exponent of the theory is Karl Radek, who, arguing in the columns of the official Izvestya of February 1gth, 1931, Soviet Dumping 81 against the accusations and ‘‘ slanders ” published in the * Capitalist Press,” states quite definitely that forced labour is both necessary and justifiable : “ Socialism generally,” he maintains, ‘“ and contemporary Communism in particular, have always demanded that labour shall be compulsory for every member of society. . . . We have never hidden the fact that we employ forced labour recruited from the overthrown class. We are liquidating the Kulaks . . . and we have never disguised this fact. We look upon it as a great conquest for our country. . . . We who have left alive Tsarist ministers and manufacturers cannot desire the complete annihilation of a large strata of Kulaka. What then? Are we to keep them in prison ? Is this the humane demand of the representatives of the European Bourgeoisie? Even if it were possible to lock up thousands of people, the Socialist Government would not do it, unless it were absolutely necessary. . . . We must therefore compel them to work. . . . We place them in distant sectors of the front where they are compelled to earn their living in heavy toil. . . . But the proletariat does not refuse to apply measures of forced labour even to the backward elements of their own class who are abandoning too slowly the inheritance of Capitalism. . . . The working class has the right to adopt ~ompulsorv measures, . . = This right is now embodied in the Soviet Labour Code, in which compulsory labour service is retained as a prerogative of the State, particularly in the case of *‘ lack of workers to carry out important State work.” By this means the Soviet Government can and does call up citizens between the ages of eighteen and forty-five for compulsory labour service. This service consists of * continuous active work in industrial undertakings for a term of two years.” The period of active service is then followed by an indefinite term of reserve which must be served “in the same or a similar undertaking.” This form of military-industrial conscription applies to all male citizens. But apart from this legalised form of forced labour, the Soviets have prepared the ground for the firm establishment of a real Slave State. On August 27th, 1929, a decree was issued ordering continuous work in industry ; all Christian 32 Soviet Dumping and other holidays were abolished. This was followed by a decree establishing ‘‘ single control” in industry and the Factory Dictator, or “ slave driver,” came into being. This official is given supreme control in the running of his factory and is held personally responsible for the results achieved. To strengthen the operations of these laws the workers were ‘“ attached ” fo their factories and were forbidden to leave one place of employment for another without special permission. A further decree provided for the * regulation of the supply of labour ”” ; this empowers the Soviet officials to transfer workers from one place to another as and when it is desired. At the same time it makes provision * against the fluidity of labour.” Finally, unemployment—an anomaly in a State where forced labour is used—was abolished by a decree issued on October gth, 1930. All unemployment benefit has now been stopped and the unemployed are forcibly dispatched to work. No excuse or refusal of work is accepted. Following this the “labour market’ has been reorganised and all former Labour Exchanges have been changed into “ Directorates of Labour Cadres,” and given the monopoly of labour supply. Only through them and with their permission can labour be engaged or “recruited.” The first call on labour has been granted to the coal industry, metal industry, transport and the ‘“ giant” factories (many of which work exclusively for export) as well as to all forms of timber workings. Black work, Chernaya Rabota, is reserved for people designated as politically unreliable, for deserters from work, and for all those who refuse the work offered. Even women are now included in the labour ““ mobilisation ”” orders. A decree issued on December 8th, 1930, concerning the employment of labour in industry emphasises that the intention is *‘ to satisfy the labour demands of the industry.” The women are to ‘‘ contribute to the creation of solid and permanent workers’ cadres.” Women in general are to be ‘released from their domestic duties,” and thus the family life of the country is to be abolished for the benefit of industry and the dumping plans. In the sphere of agriculture the same policy is being Soviet Dumping 33 carried out, Huge State farms have been established at the expense of the individual peasant, and the State exercises its ““ right *’ to decree all forms of compulsory labour. Even members of collective farms are ‘ summoned to work,” and are dispatched to any district for compulsory labour on the land and in the forests. Finally, the Soviets make the fullest possible use of the various forms of prison labour as is clearly shown in the numerous paragraphs in the Labour and Criminal Codes. Among the sentences given in the judicial reports, ‘ compulsory labour in the undertaking ” is very frequent, whilst the Criminal Code ” provides that every prison and convict settlement must “ work on an economic basis,” and that every prisoner and convict, even under sentence of “isolated imprisonment,” must ‘ produce” for his own upkeep. This has never been denied by the Soviet authorities. Moreover the system of “exile” as punishment for a variety of offences, is regulated in such a manner as to provide concentration or internment camps of exiles, under the control of the Ogpu, the Soviet Political Police. The prisoners are organised as ‘labour gangs” for various industrial and other enterprises. The mass of prison-made goods therefore forms part of the total goods earmarked for export and finally finds its way to foreign countries where it is dumped. This form of slave labour is used on a wholesale scale in the timber districts of Russia. Of the total 800 Ogpu camps in the country some 600 are used solely for lumber work. But Ogpu labour is also used in the manganese ore mines, in some oil mines, in salt mines, in fur trapping and in loading and unloading export cargoes. vl o£ Soviet Dumping MOTIVES BEHIND DUMPING ~T is important to emphasise the fact that though | dumping is nothing new in the world of commerce, Soviet dumping, because of the abnormal motives that inspire it, and the peculiar conditions that govern it, is an entirely new phenomenon. Dumping in the ordinary sense of the word, and according to Professor Viner, is normally practised under the following conditions : (#) Producers who have on hand casual overstocks which cannot be disposed of in the home market, or in other standard markets, without drastic price reductions which will “ spoil the market ” for subsequent output, often dispose of them in distant and non-standard markets at whatever prices they will bring. (b) Dumping may be engaged in for a time in order to develop or conserve foreign markets by using low prices to introduce the product into a new market or to extend the acquaintance with it. (¢) Dumping may be engaged in because the increase in sales resulting therefrom makes possible an enlarged scale of production, with consequent reduction in the average unit costs of production for the entire output, including that portion marketed at home at the maximum prices. (4d) Dumping may be engaged in because the domestic price is a monopoly price sheltered by a tariff, and the maximum price at which export sales can be made, though lower than the prevailing domestic price, nevertheless yields a net profit on its own account. (¢) Dumping may be engaged in, though it involves a temporary loss, in order to drive a competitor out of a foreign market, or it may be defensive dumping, where a producer sells at an unprofitable price in an export market in order to prevent himself from being driven out of that market bv a competing producer. These five objectives cover fully the field of ordinary Jumping but they cannot be applied to Soviet dumping. Soviet Russia has no overstocks ; she is not introducing Soviet Dumping 85 new products to new markets ; she is not desirous of reducing the average umit cost of production by large export sales ; she is not normally making a net profit on her dumped goods, andsheis neither driving nor is she being driven by competition. There must therefore be some extraordinary motive behind the present flood of Soviet dumped goods. Economic factors do not explain the phenomenon. The reason must be sought in the political sphere and will be found in the fundamental tenets of Soviet policy. As is well known, the first and foremost point that is emphasised in and out of season by every document and every spokesman in Soviet Russia is * World Revolution.” This is the goal to which every effort and every thought of the leaders of the Soviet State is directed. The programme of the Communist International, drafted by the present rulers of Russia, makes it quite clear that in the struggle for world revolution Russia is *“ the first link in the chain.” The Soviet Union, we are told quite frankly, “ drives a wedge into the capitalist system ** and it can do this because it controls “ all the means and auxiliaries of State power.” World Revolution, according to Soviet leaders, will be brought about by creating first of all “revolutionary situations.” And one of the means of creating this condition is the disorganisation of the economic order. Bukharin is the acknowledged expert on this subject and the principles laid down by him are strictly adhered to. His now famous report to the Congress of the Communist International emphasises the need for manipulating “ market relations.” His point is that economic chaos can be produced by a “ competitive struggle,” and he makes this clear by explaining that: “ That prosaic thing, market competition, is nothing but a new and specialised form of class struggle.” One of the objects of “ market competition ” is apparently to “ strike a heavy blow at capitalist stabilisation,” but, as far as it can be understood, this object is only one of many. In order, therefore, to prepare for and to instigate World Revolution through the so-called economic channel, Soviet Russia is striving to acquire prestige as a producer 36 Soviet Dumping and exporter, and a name as a purveyor of cheap goods. By these means she hopes to maintain the delusion that Sovietism is a huge success and at the same time to obtain large sums in foreign currency which may be used for active revolutionary preparations. Dumping is thus one of the most direct means of maintaining the delusion of success and for obtaining the needed cash. That Soviet dumping depresses and disorganises ‘‘ capitalist markets ”’ is evident. Last year’s wheat dumping has affected the agricultural industry in the U.S.A., Canada and all European grain-producing countries. Its consequences are already evident in importing countries and in the usual course of events, being governed by economic laws, they will affect other industries and the general economic life of the world. Here we see the application of Bukharin’s theory of market competition as ‘‘ class warfare ” in its elementary stages. Soviet Russia aims, however, at a much higher objective and the present preliminary skirmishes are merely tests. These tests are made in all branches and it is of great significance that dumping of manufactured commodities is being extended on a very large scale. Dumping in fact has become an important ally of the Dictatorship and of the Dictators. By means of dumping, the people are condemned to a perpetual system of ration cards and are kept in a state of subjection amounting almost to slavery. It is also evident that decrees of compulsory labour cannot co-exist with plenty. Only short rations can allow the continuance of labour conscription, the political police, and the dictatorship. Only short rations can maintain ‘labour discipline,” arrest “labour desertion,” and perpetuate low wages. The most sinister motive behind the present food dumping campaign is therefore seen to be the complete enslavement of the people as a means of maintaining the ruling clique in power, and preparing the way for World Revolution. Soviet Dumping 37 JT] DEFENSIVE MEASURES ~T is now obvious that the menace of Soviet dumping is, in itself, sufficiently grave to warrant immediate and A drastic counter action. But it is aggravated at the moment by the general condition of economic depression. The civilised world is not in a position to-day to disregard the aims and ambitions of the Moscow rulers. National and international action is imperative. An examination of Soviet economic relations with the outside world during the last two years—the first two years of the Five Years’ Plan—shows quite clearly and definitely that Soviet dumping is merely the logical consequence of these relations. In other words, the mistakes made by various countries in the course of their trading and financial operations with Moscow have encouraged the Soviets in their present course of action. The remedy against Soviet dumping is therefore to be found in the acknowledgment and correction of these mistakes. Since 1928, Moscow has obtained the assistance of a number of foreign engineers and experts. Americans, Germans, Frenchmen and Englishmen have gone to Russia to help Stalin to materialise his plans. Money in the form of credits for machinery and industrial equipment has actually been pouring in from known and unknown sources. Under the pretext of trade and immediate profits, deals have gone through between the Soviets and foreign firms, which have already enabled Moscow to dump abroad a variety of manufactures and even highly technical commodities. The assistance given to Stalin has enabled him not only to close gradually the Russian market to world industry, but has given him the material and wherewithal for laying the foundation of a new source of supplies of manufactured goods. He is openly planning to flood the already overstocked markets of the world with the products of his 88 Soviet Dumping *“ Socialist ” industries, built and equipped by capitalists ”’ in search of profits. Whether these ‘‘ Capitalists ”’ realise their role as assistants in a diabolical scheme for the enslavement of the whole world is difficult to say. At best it is clear that they have been, and are still being, duped. They have failed to realise that the output of Soviet industry will have to overflow from Russia to other countries and that under Soviet conditions the goods produced on lines of mass production by slave labour can withstand all competition. As regards Great Britain, the present writer has already had occasion to point out in his booklet Can We Trade With Russia? that the present trade between the two countries is financing all Soviet Russia’s economic and political plans against the British Empire. Between 1924 and 1930, as has been shown, this country has provided Soviet Russia with about £130,000,000 in trade surpluses alone. The amount given in credits for all kinds of machinery and chemicals is not ascertainable, The remedy is obvious. If, as Sir Felix Schuster has rightly pointed out, civilisation is to be saved from the Soviet menace, then it is the solemn duty of all industrialists and financiers to withhold immediately their support of Soviet schemes and plans. The measures adopted by certain Governments indicate a line of official action that may be advantageously followed. For example in the U.S.A. a Bill has been introduced and passed to the Finance Committee which would “ prohibit the importation of any article or merchandise from the Union of Soviet Socialist Republics.” At the same time the Customs Department has been considering the possibility of demanding that every importer of goods into the U.S.A. shall prove that the goods have not been produced by forced labour. And the import of Soviet timber from the Northern Provinces has been entirely prohibited. In France a special commission under the Presidency of the Minister of National Economy has been created to control import permits for Soviet goods. Great emphasis has been laid on the subject in the Soviet Press, and M. Soviet Dumping Poincaré, in a strong article in Excelsior went out of his way to warn the public of the danger of Soviet dumping. In Switzerland various schemes for combating the menace have been put before the Federal Council, and a reply will be given when the National Council meets in March. The Hungarian Government has empowered the Minister of Finance to regulate certain imports by means of licences. These import restrictions apply only to countries (such as Soviet Russia) with which no commercial treaty has been concluded. The Spanish Minister of Economy is also reported to be considering a series of measures designed to protect Spanish commerce and industry against Soviet dumping, whilst reports from Canada, Finland, Roumania and Serbia state that conferences are being held to discuss defensive measures. Even Germany is gravely alarmed at Soviet dumping. In Great Britain serious resolutions on the subject have been passed by a number of important groups, including the Association of British Chambers of Commerce, the National Union of Farmers, the National Union of Manufacturers, the Central Council of the National Union of Conservative and Unionist Associations and the Council of Agriculture for England. In every case emphasis was laid on the fact that the unrestricted import of Soviet goods is a menace to British producers and manufacturers, as well as to the majority of British workers. British industrialists and exporters have also realised the menace of Soviet dumping on foreign and colonial markets. It is quite evident that the * attacks” on the markets of the East and the Near East, and the special efforts made in South and Central America by Soviet trading organisations, are directed chiefly against British Trade. Defensive measures against present and future Soviet dumping are urgently needed both nationally and internationally. Governments, business men and financiers must anite in an organised effort to combat this new form of economic war against the established order. Immediate action must be taken or civilisation, as we know it, is doomed. 89 Soviet Dumping The urgency of the matter is brought home in a striking fashion by the following Soviet declaration, published in the issue of the Soviet Export Review of January 10th, 1931. 40 “ The Five-Year Plan is materialising ; the country is becoming Socialistic. The question as to ‘ WHO— WHOM ?’ will be answered in the World Arena. The Commissariat of Foreign Trade is becoming a fighting department for militant action on the economic battle field. . . . “ The hour of our trade attack on the export front is at hand. In places we are already taking the offensive. . . .”’ “ WHO—WHOM,” which is the literal translation of the Russian saying “ KTO—KOVO0,” sums up the whole position very pithily and lucidly. Quite briefly it means :— “WHO WILL DESTROY WHOM?” 4 4 uthentic Information on The A.R.P.A. throws light on Russia a Week fv ANGLO-RUSSIAN NEWS An authentic News Service on Russian Matters Monthly RUSSIAN AFFAIRS The fighting organ of British Claimants against Russia Periodical Special Memoranda Books and Booklets Information Issued by Anglo-Russian Press Association 82 Victoria Street, Westminster, S.W.1 MRE 06808247196 MADE AND PRINTED IN ENGLAND BY Trg GARDEN Cty Press LyD., LETCHWORTH, HERTS. } 3 3 — i A 3 g : z O N vy No) A on Cn > 3 IN 5 Cy CO re o CY o ~N oO —-0 a wm wa > ii] 4 i + 1 Soviet Dumping 11 se figures show that the greater the shortage at home, re intensified are Soviet exports; the higher the at home, the greater is Soviet dumping abroad. most intensified form of Soviet dumping began in In January the Soviets resumed the export of on a large scale and at the same time established a iystem of rationing at home. It is interesting tonote his resumption of corn exports coincided with the t decline in prices and with the most depressed conin the world grain trade. Prices had fallen to the level of the last 24 years and the official calculations rain-producing countries showed serious losses on nonted grain. Yet Soviet Russia chose this moment to its dumping campaign and in consequence prices e still further depressed. ind Fruit Pulp y in 1930 plans were completed for the dumping of ind dried fruit and a large variety of canned foods. inning industry was generously subsidised for dumpind many new canning factories were built. All of 1ave been equipped with the latest machinery and by Lo expected that 200 large units will be operating. I fficials in charge of the industry have been given A e orders to “catch up and overtake the rate of T pment in Western Europe.” dumping of fruit pulp, which was intensified in the or of 1930, had disastrous effects on British fruit 's. But this preliminary skirmish is apparently to be ped into an attack on all fronts. From reports issued b Soyusplodoovoshch, the All-Union Fruit and Vege-Products Association, it is seen that this Soviet ament department has established special factories it pulp, strawberries, raspberries, black currants and burée for cider. It is also evident that these factories osidised and that their export trade in particular is d by “ funds in aid of exports.” Q 0 3 2 1] NP : = Q ww xB Ye