Is It Time to Re-Examine U.S. Curbs?

TRADE WITH RUSSIA

ON one big commercial question--trade with Russia and her satellites--the U.S. and her allies are sharply split. Last week the split widened. Commerce Secretary Sinclair Weeks, with the backing of the Pentagon, refused to okay a deal between Texas' Dresser Industries, Inc. and the Soviet Ministry of Trade. Dresser wanted to import what it called a revolutionary turbine oil-well drill developed by Russian engineers. In return it would agree to ship the Russians some of its own rotary rock drill bits, instruct them in their use. But Commerce, State and Defense Department experts decided that Dresser would get nothing but an unproved tool while giving away the U.S. oil industry's latest technical know-how.

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While the U.S. was barring one of its own businessmen from trading with the Reds, British businessmen persuaded their government to open up trade with the Iron Curtain countries. The British eased a 1951 embargo on shipping the Chinese Reds rubber, tractors and electronic equipment, and approved a shipment of 150 tractors, though such exports are still banned for U.S. businessmen. Businessmen in Japan, France, Belgium and other allied nations were also pressing their governments to get U.S. approval of their big plans to sell to the Soviet and her satellites. Riled by this eagerness to trade with Communist nations, the House Foreign Affairs Committee last week voted to block foreign aid to any nation that ships strategic goods behind the Iron Curtain, later reversed itself.

But Capitol Hill's battle over export controls was not over; it is just beginning. After three months of investigations, much of it in secret session, Arkansas' Democrat John L. McClellan and his Senate Permanent Subcommittee on Investigations are readying a detailed report on the whole program of trade in strategic goods. Key finding of the McClellan committee: after 1954, when the Eisenhower Administration decontrolled some 200 items on the strategic list under heavy pressure from Britain and other allies, the Russians got strategic products and processes that saved them both research, manpower and years of development time. No longer is the U.S. strategic list to be taken seriously, says McClellan. The Battle Act, designed to halt U.S. aid to countries selling to the Soviet bloc, "has become an empty shell."

The biggest prize the Russians got, said McClellan, was machine tools, a basic requirement for war as well as peacetime production. Ralph Baldenhofer, who was the Business and Defense Services Administration's machine-tool expert in 1955 and is now executive vice president of the Thompson Grinder Co. of Springfield, Ohio, testified that he protested "strongly" against letting the Russians buy such machines, but was repeatedly overruled. Said Toolman Baldenhofer: "It would be much better to give them the planes, even the guided missiles. These things will come back to us once. But the Soviet bloc will be making war materials on these machines from here on."

On the other hand, some machine-tool makers argue that the change in the list helped Russia and her satellites little, since the tools released were those in common use. Moreover, manufacturers publish such detailed description and specifications of their products, plus displays at tool shows, that it is difficult to keep the tools from being copied.

Where they have had no Western model to copy, the Russians--with the help of the German and Czech engineers they captured--have boldly struck out on their own. In a few ways they have not only matched the Free World's technological progress but moved ahead of it, e.g., Russia was well ahead of the U.S. in developing a ceramic cutting tool that eliminates expensive grinding. In a private conversation with President Eisenhower not long ago, Ambassador to Russia Charles Bohlen reported that the Soviet Union had actually moved ahead of the U.S. in total tonnage of machine tools produced.

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How much Russia was helped by the relaxing of the embargo on machine tools two years ago has become largely an academic question, since the increase in Russian machine-tool production has enabled her to put many more tools up for sale in world markets, often at below current U.S. prices. This has increased the pressure on the U.S. to further relax its embargo. With Russians coming into Western markets, many European businessmen want to get into Russian markets, even though the Reds in the past have concentrated on purchases of strategic items, despite their loud talk of big orders for consumer goods. Thus, it looked as if the U.S., while banning its own businessmen from trade deals, would be faced with the prospect of seeing the embargo constantly weakened by European businessmen in search of bigger markets.

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