Page 92 - Inside the Film Factory New Approaches to Russian and Soviet Cinema

INSIDE THE FILM FACTORY 73
The decision to accumulate capital through overseas trade owed much to
favourable market conditions. The foreign blockade finally ended in 1921, and the
British began negotiating trade agreements with the USSR, a break that finally
liberated the Soviet Union from almost three years of isolation. Russia used the
opportunity to acquire crucial producers’ goods for several industries, and it traded
away raw materials and agricultural products in return. Ample supplies of grain,
coal, timber and oil allowed the USSR to buy items ranging from Ford tractors to
Paramount movies. The Soviet foreign trading system helped secure favourable
terms. The government’s Commissariat of Foreign Trade maintained a monopoly
on overseas buying and selling, even during the most freewheeling phases of NEP.
No individual firm could enter into negotiations with any foreign concern but
instead had to apply to the commissariat, asking that body to acquire the needed
foreign goods. The commissariat then purchased the items and delivered them to
the firm in question in return for a credit which the firm paid off over a period of
time. Since all sectors of the economy channelled their foreign trade requests
through this one agency, the government could closely monitor the trade balance
and arrange for surpluses in one sector to offset deficits in another. In an
‘unprotected’ economy, each individual firm would have to maintain its own trade
balance or be prepared to pay for the imports in hard currency. In the Soviet
system, however, weaker industries which had to import (e.g. film) could live off the
surpluses of other, stronger industries. Fortunately, Soviet agriculture enjoyed
good harvests beginning in 1922 and 1923 and running through much of the rest of
the decade. These combined with high grain prices in several foreign markets to
provide generally favourable terms of trade for the USSR. Industries such as film
which could acquire their imports at a relatively low per unit cost (a movie costing
less than a tractor, for example) were especially favoured by these circumstances.
In net effect, good grain harvests bought the film industry its future. 33
The Commissariat of Foreign Trade’s status as the sole bargaining agent in
international trade gave the Russians another edge in dealing with foreign film
sellers. West European and American film companies, which had balked at
investing in the USSR directly, proved eager to trade with Russia, recognising it as
the largest untapped market in Europe. But they could not deal directly with
various Russian distributors and exhibitors in competitive transactions. They had
to abide by the ‘take it or leave it’ offers of the commissariat which enjoyed the
power of a monopsonist, the sole buyer in a market. The commissariat could thus
obtain foreign films at relatively low prices, thereby enhancing the USSR’s trade
advantage. 34
When the importation plan went into effect, Goskino received a 2.3 million
rouble credit from the Commissariat of Foreign Trade. The credit covered the
anticipated worth of imports over a period of several years. Goskino would be
given the opportunity to establish a distribution monopoly for all foreign films in the
Russian market and these films were to erase the debt through income generated
by Goskino’s distributor’s share. Any earnings above the credit could then be
reinvested in new production activity. Film importation began in earnest in 1923