Moscow Gold

U.S. heavy industry has long been haunted by a nightmare: in building up the U.S. for war, it may well have overbuilt it for peace. Last week, news from Washington turned the nightmare into a beautiful dream: in the works is a U.S.-Russian trade pact under which Russia would buy $10 billion in capital goods in the U.S. in the first three postwar years.*

For months, U.S. emissaries have been quietly sounding out Premier Stalin and other top Russians on such a pact. They have found them just as eager to buy as the U.S. is to sell. Negotiations have reached such a stage that Washington insiders whispered last week that President Roosevelt carried a rough draft of the pact in his pocket when he met Stalin in Teheran.

Short Time. Russia's plan is breathtakingly simple. She wants to rebuild her bombed-out, scorched-out industries, and lift her entire economy to well-oiled mechanical efficiency--in three years. In effect, she wants to do the same job that took 25 prewar years to accomplish. The bill for this, from Russia to the U.S., will be roughly $10 billion, to be spent here for machine tools, agricultural equipment, power plants, oil refineries, i.e., in the very industries whose postwar outlook is blackest.

In payment, Russia will fork out cash and some finished products, and make up the balance by shipping vast stores of raw materials that the U.S. badly needs. Thus the U.S., which will scrape the bottom of its manganese and tungsten deposits in three years, will be able to stockpile these from Russia, along with high-grade molybdenum, chrome, mercury, zinc.

With an anxious eye on its petroleum supply, the U.S. may even import oceans of oil, store it away underground for future emergencies. (Certain geologic formations will hold it as safely as tanks.)

Long Credit. To worrywarts who shiver at the thought of what such a pact might do to private enterprise if the Federal Government doles out the contracts, there came assurances last week from Leo Crowley's Foreign Economic Administration. The tentative plan is to let U.S. business carry the ball alone, let Russia place her contracts where she wants, and arrange her own credits. Only when the Russians run short of credit would the Federal Government step in and advance funds to be paid off in raw materials.

Russians, from Stalin down, have a simple reason for the Soviet desire to rebuild its economy with U.S. equipment: "Your machines stand up."

*U.S.S.R. imports from the U.S. totaled only $146 million in the last three prewar years, have never climbed higher than $115 million in any one year.

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