Show RUSSIA HAS BIG PROBLEM State Takes Hand in Puzzling Situation By JOHN GRAUDENZ United Press Press' Pres' Pres Staff Correspondent MOSCOW B By Mail Mal to U. U J 1 Rus Russia sia sin is passing through an Industrial commercial and financial crl cri i. 5 Unsurpassed un unsurpassed unsurpassed un- un surpassed In the history of or this Country countr country coun coun- try tr since the introduction of oi the N. N E. E P P. new economic policy The Tha trusts ts with wih their high hlen prices are the goats oats and a a gene general al drive has bas started against them them The fhe he trusts o cupy a peculiar position position tion ton in Russian domestic economy In Inthe Inthe Inthe the first place they hey ate are independent governmental institutions They The for tor merly received to enable In Industry industry In- In In Russia to set get et going However However However How How- ever some ago ago these subsidies were withdrawn from nil all al except those thON classed cassed as essential industries which I by rt t the way r included CIU d homak- homak ers era of war r ra materials a l RAISED PRICES Tho The trusts met iho ho withdrawal al of or subsidies by raising prices Some of them did It I merely to hoth ends meet some to enable them themselves elv s to pay dividends of ot nom IOU ICO to per cent The he raising of prices created what they call cl in America a a buyers strike It I got so no one bought anything anything any any- thing he or oi 01 she could avoid buying The rhe result resul was that the trusts unable to sell sel their goods were compelled to apply for new credits credis Th Th- These se credits wre wro refused b by the tha state bank banI apparently apparently ap ap- ap- ap parenty acting under instructions of Finance Commissary In general the trusts told Reduce Reduce Re duce your prices so ou j-ou will ne he able to get rid of enough of your 10 to get the cash you need A general reduction In prices rang rang- ing irom 25 to 40 per cent followed The private shopkeeper who purchased pun pur chased the trusts had to meet the price cuts and of them will bo forced out of business Still the peasants are not buying They believe he pris are arc trill too high and are waiting fur for another reduction On ah ati average good prices nices ore ora from two to five times uglier thin in prewar pro pre war days On toe tie othe hand th th- peasants only get s' s com sorn orn a quarter to three quarters of tile tRe prices he got f tr produce beford the war Thus Thud the peasant really pays from six to ten times for manufactured goods what he paid before the war The government has taKen the attitude atti atti- tude tudo that no trust should be allowed to exist which is unable to operate profitably without subsidy It Is goIng go- go log Ing after the trusts from three angles First A general reduction of prices has been ordered Second no further credit will given the tru its by the state bank Third a general checking up of the costs of production in the various trusts has been ordered There are several reasons for the high costs of manufactured articles The overhead costs are too as most of the men are new and Inexperienced inexPerienced Inex inex- and tile the managing staff is inefficient I RAW MATERIAL HIGH Anither cause of the high prices Is that much of the raw material used has to be imported at a much higher price than before the World war Tho raw material obtained in Russia is also higher In the case of leather manufacturers the prices are much higher because during the wars and later during during- the famine the livestock supply In many sections was de destroyed do- do Coal and oil are also scarce and high in price largely duo due to transportation troubles The government has ordered radical reduction in the administrative staff of many of the trusts including even the professional unions which are the hardest to handle It is however denied emphatically that the present crisis will result Inthe in inthe the wiping put out of the state trusts and the substitution therefore of private initiative |