RUSSIA-JAPAN: Haggle’s End

The odds on Peace in the Far East rose sharply last week. Japan and Soviet Russia had virtually reached the end of their huge haggle over the famed Chinese Eastern Railway. This road meandering for 1,000 mi. across the upper half of Japan’s puppet state Manchukuo cost Tsarist Russia $400,000,000 (preWar) to build. Its normal annual profit from 1924 to 1930 was nearly 20,000,000 gold rubles* a year. Even in 1933, after Japan had seized Manchuria, it earned 11,500,000 rubles. It was shorter, by 3,300 mi., than the Trans-Siberian Railroad’s great circle route to Vladivostok. But its war value to Soviet Russia vanished when Japanese troops swarmed over Manchukuo. The sole question then was whether Japan would grab or buy the Chinese Eastern.

Last year the Oriental haggle began with a ridiculous Japanese bid of 50 million gold yen,† offered through the Manchukuo Government. Russia countered with an asking price of 250,000,000 rubles. By fits and starts the margin narrowed, between intervals of “deadlock,” to a bid of 150,000,000 yen, an asked of 190,000,000 gold rubles. Last week the semi-official Rengo News Agency announced that the agreed price for the Chinese Eastern was 170,000,000 yen ($50,728,000 Roosevelt), plus Soviet Russia’s recognition of Manchukuo.

* Gold ruble: STC gold.

† Gold yen: 500 gold.