RUSSIA: Doomed?

3 minute read

Sir Henri Wilhelm August Deterding, born Dutch, naturalized Briton, Director General of the Royal Dutch Petroleum Co., delivered himself in Manhattan last week of a biting criticism of the Soviet regime, particularly regarding the condition of the Russian oil fields and their administration.

He recalled that in June 1918 the Bolsheviki confiscated oil fields, refineries, machinery, stocks, assets and even the “trinkets and jewelry belonging to employes.” Added he: ” “Politically, this is called confiscation; practically, all these objects were stolen, not by representatives of the people, but by a gang who, by controlling the army, had usurped the power to do anything which would not have been tolerated otherwise.”

Sir Henri then went on to state that before the War owners could produce crude oil on an average of 15 kopeks a pood, after paying 20% taxes on profits, 5 to 45% royalties and higher wages for workmen. Now, he continued, the production of crude oil costs double, despite the confiscation of property, no taxation or royalties, lower wages to workmen and lack of strikes, which hitherto were frequent.

Continued he: “While in all oil fields in the world the production since 1917 has considerably increased, the Soviet have barely attained the Russian pre-War production, and this only thanks to the new Grozny field, which was discovered by the old owners shortly before the War, and which, therefore, only began to yield considerable quantities in 1916-17.”

The Royal Dutch head, predicting, early disaster, then wanted to know which nation or financial body was going to be “stung” by giving the last credit to the Soviets. “. . . To think that after considering the above anybody would be foolish enough to undertake the working of these fields under temporary ownership … is too silly for words. . . .”

Next day Saul G. Bron, Chairman of the Amtorg Trading Corp., a Bolshevik concern trading in the U. S., declared: “Sir Henri Deterding regards the approaching tenth anniversary of the inauguration of the Soviet Government in Russia as the proper time to make still another prediction that the Soviet Union is headed toward disaster. No one taking note of Deterding’s propaganda can escape the conviction that this is really the most inappropriate moment to make such a prediction.

“Deterding says that the Soviet oil industry has barely attained the pre-War level. He does not add that the Soviet authorities took over Russian oil fields five or six years ago with equipment almost completely destroyed by forces with which Deterding is not entirely familiar. Soviet money was used to reconstruct the industry almost from the bottom up to its present level, and this reconstruction required about $300,000,000.

“Here are actual data of pre-War and present conditions of the Soviet oil industry: pre-War crude oil production was 9,230,000 metric tons, while production for the Soviet fiscal year ending Sept. 30, 1927, was more than 10,000,000 metric tons; pre-War annual consumption of kerosene in villages was 8 pounds per capita, and last year’s consumption was 9.4 pounds per capita; pre-War wages of workers in the Baku fields were 35 rubles per month, while during the year just ended the wages averaged over 75 rubles monthly.

“Present production costs in the Grozny oil fields are lower than before the War, while in the Baku fields these costs are about equal to those of 1913. The output of gasoline from crude oil has been increased from the pre-War figure of 0.4% to over 0.7%. Deterding also mentions the Soviet coal industry. It will be interesting to learn that coal production for the year just ended was 39% higher than the figure given by Deterding for 1912.”

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