Show YANKEES FIND RUSSIA GOOD GOODFIELD FIELD TO GAIN BAIN LARGE PROFIT Americans Make lake Money Ioney ill in Competition With Red Government RICH R I C 0 IT H CONCESSIONS Henry Ford Finds Busi Busi- Business ness hess With Soviets Pays Dividends EDITORS EDITOR'S NOTE This NOTE Tills is ts the sec see second second ond of a series of articles by Jerome Davis Darts Da member of the faculty of the theale Yale ale University Divinity school who has spent the summer investigating conditions in Soviet Russia for The Standard Examiner and NEA Service These articles telling what is hap- hap happening happening pening in Irs Russia today are appearing In n this paper dally daily By Dy JEROME JEnO IE DAVIS DAIS Member lember of the Faculty of Yale Uni Uni- University University Divinity School Written Especially for The Standard- Standard Examiner and NEA Service ONt ONu O Nt might naturally suppose that in a land of naming flaming communIsm Ism sm which shelters the headquarters of the Communist and whose government go still awaits recognition recognition recognition by the United States one would find Ind no American capital As a matter of fact there arc are grow- grow growIng Ing ng and friendly business relation- relation relationships relationships ships hips between the two countries These are chiefly along three lines the ex- ex exchange change hange of Russian and American goods concessions taken laken out by Amer- Amer AmerIcans leans cans for lor the purpose of carrying on specific business enterprises in or for Russia and finally the purchase of certain expert American technical Help elp which the Russian government is using In n her own 0 projects SALES FALLING OFF Th highest point in trade was reached in 25 1924 when the United States sold worth of goods goodso to o Russia and 15 IS million more In 26 1925 United States sales had fallen to less than those hose of either Germany or England A credit of three hundred million marks by Germany to Russia was par- par partially partially lally responsible ble Little more than two years ago American concerns required cash down on all purchases es to the Soviet Union Now Vow many firms are extending credits up to two years Ford has shipped s Jef over e 2 0 tractors to into the Soviet fI Union and received over nine million dollars from Russia He has accept accept- accepted ed several hundred Russian mechanics In n his factory in order to ta better bettu train them hem for expert repair work He is isnow Isnow isnow now considering establishing an are as assembling as- as assembling assembling plant in Russia and could probably secure his own terms LENA GOLD FIELDS Outstanding among the concessions which have been granted is that of the he Lena gold fields fields fields-a a British Ameri can concern This gives the right to exploit three large mineral areas in eastern Siberia in the Urals and in Inthe inthe the he district It also provides for the utilization of coal mines for necessary heat and power The TIte life of the contract varies arles from 30 to 50 years ears company pays normal taxes plus a royalty of from 4 to 7 per cent c of U the total The concession c has proved extremely valuable and the en engineers en- en engineers report a aery very ery high profit prom this year ear The managing director says that he has found the Russian gov gov- government government government satisfactory In every way in their business relations HARRIMAN'S lANS CONCESSION The next largest concession is with HarrIman and runs nuns for twenty years ean and covers the manganese deposits in Inthe Inthe the he Caucasus Harriman agrees to build railways and introduce other equipment valued at not less than four four million dollars lie He has to pay 3 on each ton of ore mined during the first three years and 4 thereafter lie He fur fur- further further further ther guarantees to ta export at least 16 millions tons during the life of the ther contract At leeis present according to Harriman r n engineers the company y is operating on a profitable basis A A. A. A A Heller of the International company is manufacturing oxygen nitrogen steel barrows bar bar- barrows barrows rows and fittings of all kinds lie He al already al- al already already ready has hns two plants in operation and andis andIs andis is making good boad profits underselling the he government and producing a bet bet- better better better ter product In view of this fact 1 asked him whether the government was not likely to become Jealous and arid throw difficulties in Ins his way wayOn wayOn wayOn On the contrary said Mr Hel- Hel Heiler ler they arc are glad to have a model plant and are constantly criticising their own officials for being less effi eHl- dent clent I I I I are arc difficulties which you encounter I ask ed Naturally one cannot be as die dic dictatorial dic dictatorial as es in the states he replied There has to be a certain amount of ot give and take with labor and with the government to w get along The rebuilding of our plant was slower than we expected We could not riot always purchase supplies in insufficient insufficient sufficient quantities within Russia Russia- sometimes the prices of raw mate mate- materials elate rials are too high Some of the labor laws are arc ex ex- exceedingly strict but it Is easy to make adjustments for them We have to pay sickness Insurance and arid give e two weeks vacation with pay In the case of welding n work we are aro a only allowed I six hour h shifts We Je have v also been I forced to install a ventilating system which is in advance of anything re required re- re reQuired required I in any other country in the world BETTER THAN IN U. U S. S 5 I However taking into consideration all these handicaps the aggregate cost costis is 15 1 small We will make many Umes the profit over o here that we do In the United States Mr Julius Hammer has a conces conces- concession concession I sion to mine asbestos and has been working in Russia for tor five fhe years Ills His agreement has still 15 years to ta run He is Ie now equipping a factory to man man- manufacture manufacture finished asbestos products and make still sUhl more profits By Dy far fat fars his s most interesting FO FOl enterprise l N is that th of a pencil concession which the h gov government gov- gov government has now modified to Include In de fountain pens At AL first glance the terms of tills this agreement g th seem e very V unprofitable J rl Mr Hammer has to O build I and equip pM a complete pencil factory and arid turn lurn it over to the government go within 10 Continued on Page Pace Two Tao RUSSIA YIELDS YANKS PROFIT Continued from Pace Page One years teD During D this S period he has to compete te with state ta plants pr He has to pay a tax of 10 per cent of the total turnover whether or not he loses money In addition he has to pay 8 per cent of ot his net Income and half of any additional profits DESPITE OBSTACLES In spite of these obstacles the con con- concern concern concern cern has been so profitable that al al- al aIn aIh although though they h r only made an original In Investment in- in investment n vestment n ot of a million roubles I within m a single year they cleared more than a million In net profits after paying all taxes This success s is due to the production of A 1 better article than that At Jf the state factories Hammer uses u es American cedar In his pencils shipped cut while the Russian factories are arc compelled to use nn an Inferior home product Bays Sas Mr Hammer At present fountain p pens ns are selling tor lor 35 3 roubles each We will manufacture them to sell at 10 roubles and even then will make large profits After Arter modifying our concession to Include fountain pens the government was wu generous enough to place a R duty of 18 roubles on each fountain pen n import Import- imported ed cd ed so that we are absolutely protect protect- Some of oh the largest lar t concerns In the United States arc now negotiating for contracts contracts' running up into the hun bun hundreds of millions of dollars At least one of these is likely to be definitely concluded In the fall All of or these Americans regardless of Cf their particular specialty are arc apparently apparently a WIlt unit uni In believing that the Rus flus- Russian sian government Is there to stay that It should be recognized and that there are unlimited possibilities now for pro American investment In Russia R I Another nother Article Tomorrow I |