THE MORNING OREGONIAN, TUESDAY, MAT 2, 1922
QUBLE IN 4
MATED 6 1-2 TIMES
Value of Soviet Currency
Drops to One-Twentieth.
NEW DATA IS OBTAINED
Depreciation Proceeds Thrice
Fast as Inflation as Result
of Large Issues.
BY JOHN J1AWABD KETXES,
Fellow and Bursar. Kings college, Cam
bridge; editor Economic Journal, Lon
don; author of "The Economic Conse
quences of the Peace" and "A Revision
of the Treaty."
(Copyright, 1922, by the New York "World.
All Rights Reserved. Published by Ar
rangement.) GENOA, May L (Special Cable.)
I am able to supplement my previous
articles on Russian finances by some
further Information which has been
supplied by M. Preoballensky. a mem
ber of the collegium of the commis
sary of finance and chief financial ex
pert on the Russian, delegation to
Genoa.
The following table, which includes
figures for the issue of paper money
since the beginning of last December,
gives the whole position succinctly.
As before, a gold ruble signified not
a quantity of gold but the internal
purchasing power of a gold ruble in
1813. Perhaps this table can claim
the distinction of giving the first
monetary statistics which have ever
been expressed in units of trillions:
be maintained, everything depends on
the assets against which the notes are
to be issued. On this point there are
two schools of thought in Moscow.
Store of Value Proposed.
One school holds the notes should
be issued only against gold or foreign
currency arising out of the export of
goods and delivery of goods actually
available for export.
The other school holds the bank
should also issue small denomination
notes in exchange for soviet treasury
notes at a fluctuating rate, depend
ent on the purchasing power of the
latter in terms of gold rubles from
time to time.
The object of the second school Is
to provide a reliable store of value
within the country itself, a normal
function of money which the soviet
note admittedly supplies no longer,
and so stimulate the usual Instincts
of individuals towards the acquisition
of a little wealth.
It is interesting that the bolshevlsts
should come to recognize the neces
sity for this incentive.
Fluctuating Market Certain.
In either case, the soviet ruble
would have a fluctuating market
value in terms of the stable bank
ruble. But the doctrine of the second
school opens the way to gradual de
terioration of the bank ruble along
the same course as the soviet ruble.
and it appears essential to outsme
observers that the stricter doctrines
of the first school should be rigor
ously maintained, at least for some
time to come.
Tf onlv this bank can De tounaea
on sound lines, It seems to point the
way to suitable machinery for em
ploying foreign credits to the best
advantage.
Suppose, for example, the bank were
to establish a reserve fund in London,
of which half were furnished out of
its own resources and half out of
credit from the British treasury, then
sterling drafts against the fund could
be supplied to importers approved by
the bank of Russia with which to
pay English exporters, approved by
a joint committee of the Dank and the
British board of trade of London; and
if the proceeds of Russian exports
were paid by the bank into this re
serve it could form a revolving fund
TO POSTPONE DEBTS
Interest to America Will Be
Met as Usual.
NEW BUDGET CUTS TAXES
Chancellor Says Turning Point Has
Come and Redemption of Bills
This Year Unlikely.
Notes outstanding In trillions of rubles on
first of month
Notes Issued during month. In trillions....
Per cent additions during month...'........
Thousands of paper rubles equal to one
gold ruble on first
Per cent depreciation during month
Total note issue on first of month in mil
lions of rubies
Dei. Jan. Feb. Mr.
21 22 22 22
11 17 29 48
12 19 23
65 70 65 48
107 170 420 1,060
57,103 147,100 152,690 98,450
April.
22
71
The table shows that the Inflation
of the currency to six and one-half
;imes the previous volume within four
months has been accompanied by a
fail in the value of the paper ruble
to l-20th.
Paper Money Value Kails.
Thus enormous Issues of paper
money have shaken confidence to
such an extent that depreciation has
iroceeded three times as fast as In
flation with the result that the pres
nt aggregate value of the note issue,
namely about 5,000,000 sterling, on
vpril 1 was quite insufficient for the
teeds of the country.
Consequently outside of the towns
barter still persists, much of the rev
nue Is collected In kind and we have
ne paradox of the. greatest volume of
ote issue ever known leading up to
in Insufficiency of money.
During the first ten days of April,
vhlch is the latest date for which a
:gure is yet available, the value of
ie currency depreciated a further 17
. er cent.
Some Recovery Predicted.
But Russian experts argue that
rovided they can moderate the issues
f currency, as to which they express
praiseworthy determination, the
itherlng in of the harvest will be
companied by some recovery in the
alue of the paper ruble.
One other set of figures is of great
"terest, at any rate to students of
irrency. By issues of paper money
e state is able to levy surreptitious
nation on its subjects and thus ob
iin command of real resources.
But how far can this process be
irried before It repeats itself? In
ussia the experiment has been
ished to the last extremity and it
; Instructive to inquire how much
al resources the soviet government
is been able to extract from first
to last by this instrument of taxation.
Purchasing Power Discussed.
If the fresh note Issues of each
erlod be translated into terms of
ieir pre-war ruble purchasing power
: the date of each issue, I am in
armed that the purchasing power
-.us secured by the state has amount
ie to the following sums:
Nineteen hundred eighteen. 529,000,
0 gold rubles; 1919, 280.000,000; 1920.
.6,000,000; 1921, 143,000.000; January
o March, 1922. 6).000,000.
According to the estimate men
oned in my prevsous article, the so
et government experts will raise In
.is way during the second quarter of
22 the equivalent of 30,000 000 gold
ibles. Thus the total for the whole
riod amounts to about 1,300,000,000
ld rubles.
How much cleverer is the modera
on of the bourgeois governments.
How much more successfully they
uploy this surreptitious instrument
uf taxation.
Others Raise Larger Sums.
During the same period the gov
rnments of France and Germany
ach raised by the same methods
ajger sums than this.
All these figures exhibit with re
narkable frankness the collapse of
lethods adopted hitherto. What is
he plan for the future? The Rus
ans are not converted to the opinion
hat even a soviet state needs a
-aolcsome currency and they are try
.ig to frame a policy accordingly.
The trend of their Ideas is as fol
ows: Notes issued at present are not
. ank notes but treasury notes.
With the return to monetary econ-
mics, the bolshevists have instituted
i new state bank, the primary func-
on of which is to deal with foreign
xchange and finance imports and ex
. orts.
It is proposed that this bank issue
t new note which should be cashable
or foreign currency at a more or
ss fixed rate by holders who have
I legitimate trade demand for such
trrency. If such encashability is to
jjfcv jRed Fox
Wlfe-BCl Formula of a
wtjy ? si pharmacist of
If BJdTeoure;
Try the JJrug Store First"
on the lines of the Cold exchange
standard.
Confidence la Predicted.
Out of the business contracts, thus
established bet-ween individuals mu
tual confidence would grow up if it
was deserved, and trade might gradu
ally develop on the only possible per
manent basis, namely, that of personal
confidence between individuals and
corporations in the two countries.
But no one at Genoa, eo far as I
can discover, is interested in practical
details of this kind. The whole dis
cussion is concentrated on the ques
tion of whether, in spite of war and
revolution and the complete boule
versement of the existing order, a
pretense cannot be patched up for
the benefit of foreign creditors that
nothing has changed.
The idea that, in spite of all that
has happened, foreign creditors are
going to be paid as though nothing
had happened, is, coolly considered,
improbable.
Discussions at Genoa have no value
and are remote from the realities.
The latest proposals of the French do
not provide and are not intended to
provide any basis of agreement.
But even if, as seems increasingly
likely, we . and the Italians break
away and offer our own more reason
able scheme there are still immense
difficulties in the way. I see no
s'gns of our offering the Russians a
sufficiently tangible inducement for
them to take on themselves the heavy
burdens of the past.
Russia Can't Pay Now.
And even if we bribe or threaten
them Into repeating some formula
about the old debts It will have no
value in practice. Russia can pay
nothing now, and formula or no for
mula our own private investors are
not so fool'sh that they are going to
lend her in the near future any con
siderable sums.
I doubt therefore whether in any
case all this discussion about debts
can lead anywhere for the present. If
Russia recovers sufficently, provided
she thinks it worth her while of meet
ing part of her liabilities, and If by
that time experience has sufficiently
been restored here for there to be a
possibility of new private investors
coming forward, then it will be time
enough to consider details of compo
sition with the old bondholders.
The right method now is to start
afresh, to abandon International con
ferences and encourage individual
countries and their citizens to make
tentative experiments with the aid of
moderate government credits as to
whether the new Russians are or are
not the sort of people with whom it is
poss'ible to do business.
LONDON', May 1. (By the Assocl
ated Press.) Sir Robert Stevenson
Home, chancellor of the exchequer
introduced in the house of commons
today the budget for the fiscal yea
1922-1923, embodying estimates fo
910,775,000 revenue and 910,069.00
expenditures. The expenditures in
elude 25,000,000 for contingencies.
This much discussed budget con
talned only one surprise.
Reduction In taxation, for which
there has been strong agitation, came
as expected. One shilling in the
pound Is taken off the income tax,
four pence off the duty on tea, which
reduces the duty from one shilling to
eight pence on the pound, and a cor
responding reduction of one-third in
the duties on coffee, cocoa and chic
ory. The reduction in the Income tax
is a concession to the upper and mid
die strata of the community, while
the other reductions are particularly
for the large section of the popula
tion whose incomes are below the In
come tax paying level.
Debt Payment Postponed.
The important surprise which the
chancellor gave the house was the
announcement of a temporary chan
of policy regarding the payment of
debts.
After showing that the external
debt now standing at nearly 11,000,-
000,000 had been reduced by 274,000,
000 eince March, 1919, he gave it as
his opinion that the turning point
had come and the taxpayer should
not be asked to redeem any debt this
year. Explaining this policy, he con
tinued:
"It involves, firstly, suspension of
the sinking fund and secondly, that
we should meet our obligations to
wards the holders of securities by re
borrowing for the purpose. 3ut this
will not add to the genera,, burden
of debt.
Bill Prom America Drops.
The chancellor explained that the
external debt consists almost entirely
of debts to the United States and Can
ada and certain allie3 who owe Great
Britain much more than she owes
them. The debt to the United States
was equivalent to 1,301,875,000 two
years ago, when the exchange was
330, but, he pointed out, it was now
reduced to 946,S20,000 with the ex
change at $4.40, and when the ex
change was restored to par, as he
hoped, the debt would be 856,030,000.
Incidentally, Sir Robert remarked:
"We are saddled in the present year
with a new burden in the shape of
interest we have to pay on our debt
to the United States. That we shall
meet without question. '
The house cheered this statement.
He also called attention to the fact
that the budget had run taken notice
of any possible payments from Ger
many, because the government would
regard those as windfalls.
BRITISH TO DEAL ALONE
(Continued From Firat Page.)
ACTION UP TO RUSSIA
(Continued From First Pag-e.)
ing out their own destiny. There Is
no desire to interfere In their Internal
affairs. The principle that Is in
volved Is one that we cherish here.
Its application has been somewhat
complicated by the organized efforts
on the part of the soviet regime to
interfere in the domestic affairs of
other peoples.
"With respect to Intercourse, it is
quite evident that you are under a
serious misapprehension. There are
no legal obstacles to trade with
Russia. The obstacles that exist to
trade with Russia are due to the
situation in Russia, which is in the
control of those who dominate the
affairs of Russia. Some time ago I
pointed out the essential conditions
for a return to productivity in Rus
sia. That was not a tormula; that
was not an artificial conception; that
was simply a statement of fact. Rus-
l needs credit, but it is idle to
expect credit unless there is a basis
for credit. That basis for credit can
not be supplied from the outside.
That basis for credit has got to be
supplied inside of Russia,
Matter Up to Leaders.
"Political recognition follows the
establishment of a sound basis for
intercourse. Political recognition is
dependent upon the existence of &
government that is competent to dis
charge, and shows a disposition to
discharge in its international obli
gations. This whole matter is in the
control of those who dominate the
affairs of Russia- We are most de
sirous to do what we can to aid in
Russia's recuperation, but they must
establish the basis for recuperation."
later in the day. Still the Belgian,
held out, and the memorandum will
go to Russia without their consent.
As it stands the document de
mands that the soviet deliver to for
eign nationals whatever property
they formerly owned or a definite
equivalent.
Weighty Decisions Faced.
Weighty decisions in this connec
tion will rest with the arbitration
committee appointed by the bond
holders. Russia and Chief Justice
Taft of the United States supreme
court. The committee will be the
biggest court of claims ever insti
tuted and will have many years
work ahead of it if the ultimatum
is accepted.
However, as I have said, the
starch is taken out of the document
by Mr. Lloyd George's1 willingness to
agTee separately, if common agree
ment is impossible, and Russia's new
policy of accepting the best terms
private concessionaires will offer.
If the soviet can sign up a number
of other agreements like that with
the Shell oil group, it will have a
precedent which will force the Ge
noa conference to accept similar
terms as a new basis for negotiation.
members of this commission will
represent all the bondholders and the
Russian government, respectively.
The commission will have power to
remit interest and decide all ques
tions affecting foreign bondholders
and Russia's ability to meet her ob
ligations, a time limit will be fixed
In which bondholders may make their
own arrangements with the Russian
government, if they desire, mixed
arbitral tribunals, one for every in
terested nation, will be set up to
deal with the question of the property
of foreigners which has been nation
alized; the chairman of each would
be named by the chairman of the
mixed arbitral commission-
In the plan adopted, practically
everything which savored of capitula
tions or infringement on Russia's
sovereignty was waived. The French
suggestion of a provisional adminis
tration, pending Russia's establish
ment of courts on the basis desired
by western Europe, was not approved.
Labor day was a real labor day for
the Genoa conference. The sub-commission
on Russian affairs rushed Its
consideration of the Russian recon
struction plans and came through late
tonight with approval of the draft of
the proposals.
Belgium alone held out on the sec
tion relating to the treatment to be
given to the property of foreigners
nationalized by the soviet govern
ment. This is a vital point in the pro
posals and has been stubbornly con
tested. France finally subscribed to the
project proposed by Great Britain,
where the use of the property will
be restored wherever possible and in
other cases compensation will be ar
ranged through mixed arbitral tri
bunals. Belgium stood firmly for the prin
ciple of restitution and went on rec
ord as protesting, declaring that the
vested interests of Belgians in prop
erty in Russia amount to 100,000, 000
and that Belgians will never again
invest in Russia unless restitution is
made.
In the discussion relating to the
treatment of foreigners, the adminis
tration of justice and the general lib
erty of foreigners to travel and en
gage in enterprises in Russia, it was
decided to abandon those sections of
the London experts' report which re
ferred to certain measures whereby
the immediate restoration of Russia
would be facilitated.
Among the provisions in this report
thus given up was that requiring the
consul of a foreign country to ratify
the decision in a criminal case af
fecting the citizen of the consul's
country before such decision could be
carried out. The delegates agreed
today that such a measure would be
a distinct violation of Russia's sov
ereignty.
Similarly it was agreed that the
suggestion to insist upon exceptional
treatment and protection for foreign
workmen in Russia and Russ'an
workmen employed by foreign compa
nies would be unjust in its operation
and harmful to the liberty of the
trades union movement, not only in
Russia, but throughout the world.
Concerning the general question of
treatment of foreigners, a paragraph
was inserted setting forth that inas
much as perhaps restitution of Rus
sia depends upon the re-establishment
of freedom of movement and honest
and equitable administration of jus
tice, the Russian government prom
ises to undertake the establishment
of these conditions immediately..
Visiting Irish to Be Entertained.
night for a reception to be tendered
the members of the Irish republican
party, headed by Countess Markie
vicz, due here Thursday at 6:15 A. M.
hotel and at 10 o'clock will leave for
a i ip over lug tjoiumDia nignway.
They will return here for dinner and
Knights of Pythias hall and labor
temple, to which the public Is invited.
o aamission win oe cnargea.
Fir knots for furnace and fireplace.
Edlefsen's. Broadway 70. Adv.
57
TACT'S AID IS TO BE ASKED
Naming of Chairman of Russian
Arbiters Is Desired.
GENOA, May 1. (By the Associated
Press.) Chief Justice Taft of the
United States spureme court will be
asked to name the chairman of the
mixed arbitral commission to be es
tablished for controlling the debts
owed by the Russian government to
foreign bondholders, according to the
plan arranged today. The other
Home late?
No, not too late. You
can have a perfectly
prepared, perfectly de
licious hot meal on the
table in just a few
minutes. No work. No
fuss. No time. Simply
heat and serve.
HEINZ
Spaghetti
Ready cooked, ready to serve
Oil Tanks Are Received.
HOQUIAM. Wash., May 1. (Spe
cial.) Tanks have been unloaded at
the site of the Union Oil company's
new distributing station here and
will be set up at once. The city
building department has issued a per
mit for building work, which it is
estimated will cost $15,000. The com
pany has a large site not far from
the Cow Point property of the port
commission and has direct railroad
connections of its own, with three
lines.
EMERGENCY
traffic a
police
on
duty 1
1
iWSi
a r t t -mr-rTBHi
.VVal.-
Introducing also a little brother-act entitled, "Bantam
The New Playsutts for Boys." Now every boy can
have a playsuit with the "boy idea" built into it. Nary
a girlish feature about Bantams. Yet there's enough
red trimming and natty design to please mother's eye.
Other features: double drop j seat, double knees, two
roomy pockets. Ask your dealer to show you Bantams 1
thryAnean a dollar more wear for an extra quarter.
f y
4 song of May time
Happy day! when kiddies first slip into Kute Kuts for their
endless season of play. Happy day for mothers, too !
To the child it means a playsuit free and easy nothing to
chafe or hamper the movement of her little body. To the
mother it means a playsuit smart yet practical in which chil'
dren can romp to their hearts'" content and yet look "dressed'
up" all the while.
Kute Kuts made playsuits fashionable. The wide Dutch peg,
narrow red piping, shiny metal buttons, handy patch pockets,
high curved waistband with cunning pleats front and back
these give Kute Kuts their distinctive style. And what gives
them wear? Sturdy, close-woven fabrics, stoutly sewn seams,
traditional "Can't Bust 'Em" workmanship with "every stitch
guaranteed." Playtime no longer means mending time to mother
thanks to Kute Kuts.
Why not usher in playtime for your youngsters today by
asking your dealer for these stylcplus'wear playsuits? Priced
surprisingly low, too! At most good stores in a wide range of
patterns and play-proof materials.
fAN'T bust' EM
UNION MADE
KUTE KUTS
PEG-TOP PLAYSUITS
Made by Eloesser-Heynemann Co. San Francisco Los Angeles Portland
Manufacturers "Can't Bust 'Em" Overalls, Trousers, "Argonaut" Shirts, etc
Kute Kut design patented U. S. P. tent No. 56470. Infringements will be prosecuted
JpREEf
H : mssk m
East 7300
Telephone Exchange Service to
All Branches
Seeing Is Believing
Just to convince you that our new
Carpet Cleaning Department is all
that we claim
the largest, the most modern and the
most efficiently operated on the Pa
cific Coast
During the month of May, we will
call for and return to you thor
oughly cleaned in "The Enke-Way"
One Small Rug
either Oriental or Domestic not
over 15 square feet and
it won't cost you one penny
We guarantee not to run the colors
or injure the texture.
"Such Is Leadership!"
Main Office and Plant,
East Third and Ash Sts.
Three Branch Offices:
283 Alder at 4th st.
Liberty Theatre Bldg.
365 East 15th St. N., near Bdwy.
THOMPSOfcMI
Dtep-Cnm l.en.e.
Are Better.
Trade-Mark Registered.
THE SIGN OF
PERFECT SERVICB
Thoroughly .xp.rl.no.it
Optometrists (or the exam
ination and adjuatm e n t a.
Skilled workman to con
atruct th. lenses a cod
c titrated service that
guarantee, dependable
glasses at reaaonable prices.
Complete Lena (Grinding
Factor- oa tbe Premise
SAVE Y'OUR EYES
THOMPSON
OPTICAL INSTITUTE
For th. Conservation and
Bett.rment of Human
Vision.
(Not a School)
ZOS-IO-II Corh.lt Banning,
Fifth and Morrlaoa St..
Established 10.
Cbas. A. Kuaco
Pres. and Q.n. Mgr.
A CLEAR COMPLEXION
Ruddy Cheeks Sparkling Eyes
Most Women Can Have
Says Dr. Edwards, a Well-Know n
Ohio Physician.
Dr. F. M. Edwarda (or II years
treated .cores o( women (or llvar and
bowel ailmente During these years he
gave to his patients a proscription
mads of a (aw wall-known vegetal'
Ingredients mixed with olive oil, nani
lng them Dr. Edwarda' Ollv. Tabl.is
You will know them by thalr ol'v.
color.
These tablets ara wonder-work, s
on the liver and bowels, which aacat
a normal action, carrying off the
waste and poisonous m.tter la aa.
system.
J( you hav. a pal. (ace. sallow look,
dull eyes, pimples, coated toagu.
headaches, a listless, no-good (saline,
all out o( sorts, lnactlv. bowels, you
take on. o( Dr. Edwards' Ollva Tab
lets nightly (or a Urn. and nota the
pleasing results.
Thousands of women and man take
Dr. Edwards' Olive Tablets tha aw -.g(ul
substitute (or calomel now
and then Just to keep thern (It lis
and 0c. Adv.
Read The Oregoj&aa classified ads.
Read Xfce Oregon'an uaastfiad -
I