SOCIALISM FIRST AIM IN SOVIET’S PROGRAM: TRADE GAINS SECOND

Collectivization of the Peasants Ahead of Schedule. Output Is Called Promising.

INDUSTRIES STRESS TEMPO

Factory Products Low in Quality and Quantity, but They Are Improving Slowly.

WASTE IS HELD INEVITABLE

But When They Succeed, Russians Say They Will Demand a Big World Market

This is the second of a series of articles on Russia today by The New York Time’s Moscow correspondent, who is at present in Paris. The first article of the series was published in The New York Times on Sunday.

By WALTER DURANTY.

Special Cable to THE NEW YORK TIMES 

PARIS June 15. -- To start as the writer does from the premise that the five-year plan is not a mere budgetary program or a rigid scale of facts and figures, but a national policy and slogan, and a physical expression of all that is meant by “Stalinism” does not prevent persons outside of Russia from saying “Whether that is true or not, what we want to know is how the plan is working and ‘that will happen if it works.”

The first question is particularly hard to answer because the Soviet Union is the first example in history of a country in which home and foreign policy, home and foreign trade, industry, agriculture, finance and other activities are all gathered, so to speak, in one hand, each of whose fingers is from the outset-confusing though it seems at first sight to speak of Maxim Litvinoff’s rather unexpectedly successful speech at Geneva as being directly cognate to Soviet oil production or freight—car loadings, or timber export or the Spring catch of fish and the grain sowing program.

Economic Aspect of Plan.

In an attempt to minimize this confusion the writer will treat Soviet foreign relations and foreign trade in subsequent articles and right now consider the five-year plan’s economic side.

First and foremost comes agriculture, which for the next decade at least will count most in Russia. Here to, something other than economics enters at once--the five-year plan in addition to the economic production of agriculture involves the political socialization of peasant holdings, or collective farming as it is called.

The writer ventures to say that it is far more important to the Kremlin to have 60 per cent of the peasant holdings collectivized - this year which is the case, as compared with the original five plan program of 50 per cent collectivization by 1933—than to produce an exportable surplus of 15,000,000 tons over internal needs. Well, collectivization, or the political end, has been done, and it will depend largely on the weather as to how far the production program will be accomplished.

The same applies in general terms to industry. The Kremlin is more concerned over whether the industrial workers are learning their jobs and getting all keyed up for socialism by “shock brigades” and “Socialist competition” than what they actually produce. At least, that is true for the time being. In this respect the political gains are greater than actual production, which varies from fair to middling, as far as raw materials are concerned, down to poor when it comes to finished products. Oil production is good; manganese good; coal, iron and steel middling; transportation, not so good but improving: nonferrous metals, the same, and all manufactured goods, from electric light bulbs to tractors, nothing remarkable but growing in quantity and improving in quality. Detailed figures are confusing and do not matter much as compared with the “tempo.” but in any and all cases one may say the supply produced is far inferior to the home demand.

Home Supply Is Growing.

On the other hand, the supply does grow and enables the Soviet Union t export enough to pay for purchases from abroad. What the supply costs and whether or not it is a product of an abominably low living standard simply does not matter to the Kremlin, which dismisses the dumping charge also as nothing more than a hostile manifestation. For the Kremlin knows it wants to raise the Soviet living standard and would much prefer to sell goods at high prices on a strong market than on a low and falling market.

But the Kremlin asserts it has no choice in the matter owing to the “credit blockade,” which forces Soviet Russia to sell in order to buy the equipment and advice it needs from abroad. The foreign accusations that Soviet Russia is trying to ruin world capitalism by dumping are considered by the Kremlin to be beneath contempt. I will treat of this point later in a discussion of the present status and activities of the Comintern [Communist International].

A more immediate question is what success Soviet Russia is really making with its new heavy industry. Allowing that the Soviet Union can build great tractor or steel plants, electric power stations and paper mills—can it run them properly? To that the answer at present is more generally no than yes.

Almost without exception new Soviet plants, coal mines, railroads and other enterprises, clumsily and wastefully managed, produce goods of indifferent quality and in amounts below the schedule. But—and it is a most important “but”—the Russians are learning and improving every day. If they cannot get their steel mills built they will give John Calder [American construction engineer] unprecedented scope for a foreigner, to show them how, and to meet the coal shortage they are adopting a mixed commission scheme as suggested by Charles E. Stuart [of the American corporation, Stuart, James & Cooke].

Cites Our Industrialization.

That they will break and waste a lot of valuable foreign equipment is certain, but they answer that argument by saying:

“Didn’t American industrialization in the three decades after the Civil War cost a frightful amount of waste and grief. Didn’t bank failures, panics and railroad reorganizations cost tens and hundreds of millions of dollars? Take the history of the American transcontinental railroads, say, or oil development or metallurgy —didn’t you pay dearly for experience under your capitalist system?.

“Our loss in ruined machines and misapplied effort will be far less than that of your construction period, where irresponsible and greedy individuals without plan or united purpose fought and wrecked each other and melted the nation’s gold like water, careless of anything save that a fractional amount of the millions remained in their own pockets.”

Just the same, In the writer’s opinion, based on the advice of scores of foreign specialists of all nationalities, it will be twice or thrice five years before Soviet Russia gets her industry going on scale and with efficiency to compare with America or Germany now.

But suppose that happens—suppose the end of the next year shows the five-year plan to be “successful” in the rate of industrial and agricultural production and vastly increased in quantity—what then? In that case one thing is certain—and the capitalist world may as well realize it now as 1ater—Soviet Russia will demand a place in the export market world at least equal to that of Czarist Russia.

Eager to Enter Agreements.

The Soviet Union is willing—nay, eager—to join international quota arrangements with price and sales limitations on level terms, or would doubtless consent to a reduction of her exports for the time being any way if credits were offered in exchange. But nothing short of a world embargo will prevent Soviet Russia from selling her goods—at a lower price than any capitalist country can meet—in order to buy the equipment she requires.

On the other hand, the Kremlin asserts its country offers the greatest potential market in the world today if only foreign countries will give it a chance to buy. Russia needs everything. Suppose her new factories and collective farms succeed beyond wildest dreams—they still could meet only a quarter of the national demand.

“If you force us to compete with you,” the Russians say, “don’t howl when our competition ruins you. But why compete? Why not make an amicable arrangement for mutual benefit.” That is the meaning of M. Litvinoff’s speech at Geneva and of the Soviet delegates’ terms at the London wheat conference. M. Litvinoff’s speech and the wheat delegates’ readiness to accept a quota system were apparently a surprise to the rest of the world, but not to anyone familiar with the recent developments of “Stalinism.”

In a subsequent article the writer will explain this further in its relation to the Comintern and the Marxist theory of a world revolution.

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© The New York Times. 1931.  N.B. The executive editor of The New York Times, Bill Keller, told The Washington Post on October 23 2003, that the newspaper would have no objection if the Pulitzer Prize Board wanted to revoke Mr. Duranty's award. Mr. Keller called Mr. Duranty's work "pretty dreadful. ... It was a parroting of propaganda." It will be taken as read that no royalties are due on this un-authorised reproduction of this article  As such they are also perceived, as having no truthful value whatsoever, are only reproduced  for academic and educational purposes, not intended to defraud The New York Times of any morally legitimate royalty revenue and are published without financial gain. In any event, the copyright for the above may well only reside, 70 years after its publication with the heirs of Walter Duranty, and with whom we have no personal animosity whatsoever. Nevertheless, any contention of copyright violation may by taken up under the jurisdiction of English Law. My service address for any legal correspondence is: Nigel Linsan Colley, 1, Crown Street, Newark, Nottinghamshire, England, NG24 4UY. Any prosecution will, you can be assured, be defended in the public domain.