East-West Trade Trends: Mutual Defense Assistance Control Act of 1951 (the Battle Act); Fourth Report to Congress, Second Half of 1953 — John Shaqi
East-West Trade Trends: Mutual Defense Assistance Control Act of 1951 (the Battle Act); Fourth Report to Congress, Second Half of 1953United States. Foreign Operations Administration
History
East-West Trade Trends: Mutual Defense Assistance Control Act of 1951 (the Battle Act); Fourth Report to Congress, Second Half of 1953
United States. Foreign Operations Administration
Military assistance; Mutual security program, 1951-; United States -- Commercial policy
The expansion of Soviet oil sales gave rise to bitter price wars
with established oil groups. The bitterness was made more intense by
the fact that the Bolsheviks had neglected to settle for the foreign
oil properties that they had seized after the revolution. As in all
exports, the U.S.S.R. was more interested in total receipts of foreign
exchange than in making high per-unit profits; so it could and did use
price cutting as a means of achieving a foothold. Subsidiaries of some
of the world oil trusts then tried to drive the Soviet oil back home by
underselling the Soviet monopoly. But the attempts failed, and Soviet
oil won an important place in world markets.
In the late 1930's, the oil was withdrawn. Soviet exports dropped back
to 1.4 million tons in 1938, and kept fading. After the war, they came
back only in a trickle--for example, 100,000 metric tons in 1951 and
250,000 in 1952, then rising to 450,000 in 1953 as some of the new
commitments of 3.5 million tons began to be fulfilled.
Meanwhile the war had swept additional oil into the Kremlin's hands,
including the oil wells of Rumania and those which were taken over as
"German assets" in the Soviet zone of Austria. And the oil exported to
the West from these new Eastern European acquisitions greatly exceeded
the exports of the U.S.S.R. itself, amounting to 1.2 million metric
tons in 1951, 1.7 million in 1952, and 2.3 million in 1953. In recent
months, while the U.S.S.R. was making agreements to ship 3.5 million
tons, the new export commitments of these other properties in Eastern
Europe became known only in part, at least at this writing.
The Soviet bloc, though still short of certain specialized refined
products, probably has the oil capacity to make considerable exports
for at least some years, if the Kremlin so decides. Whether the bloc
will indeed step into the world markets in an important way, as
the U.S.S.R. did in the twenties, is of course not known. The West
is watching closely to see whether the Kremlin will again use its
monopoly control to undertake a major campaign of underselling other
suppliers in world markets.
It was natural for oil-importing countries in the free world to be
interested in new supplies from the Soviet bloc, especially if the
price was attractive or if the transaction also enabled a free country
to market its own products in the East. But the West could not forget
past patterns, nor ignore the problems brought by new Soviet sales.
Public-domain text, read in full here on John Shaqi.
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