ABSTRACT
Recognition of Russia, subject to important conditions, would probably involve a slow readjustment toward capitalism and a "strategic retreat" from communism, accompanied by suitable plausible explanations to the Russian masses. Communist propaganda was based on certain theories and had definite aims. Propaganda was then abandoned as an immediate policy, although ultimately the aim of the Soviet leaders still seems to be world revolution. On both exports and imports, therefore, the Soviets suffer a substantial loss. Lack of foreign credit has resulted also in inflation. These three losses probably exceed the annual interest on the entire foreign debt now in default. The policy of the Soviet government on Russia's debt is shortsighted, to say the least, in striking contrast with the large vision manifested in other aspects of the Soviet economic life. International loans to Russia would be of world-wide benefit. Such loans would lessen the pressure of Russian exports, regarded as dumping by the injured competitors.
