entirely abritrary taxation levied on business enterprises in towns — the
‘transport-tax”, the tax on current cash levied in every household, the tax
for municipal administration, the single impost on reconstruction work,
etc. — all led to the circumstance that in Moscow and in large towns,
65 0 of trade enterprises, as well as business agencies and small trade under-
takings were closed in the autumn of 1924, which had originated in the
early stages of the mew economic policy.
To this time also belongs the final formation of the credit system still
in existence at the present time. The credit system of the country consists of
a State bank with a number of branches, of a bank for foreign trade, of a
State bank at Moscow, of a Central Co-operative bank, of the Co-operative
bank of the Union, of the Commercial and Industrial bank, of the bank
for granting loans to agriculture, and of the Electro bank. Of all these
banks, the following are at present of essential importance: The State Bank,
the Industrial Bank and the Co-operative Bank of the Union.
There were still a whole series of companies granting reciprocal credits
and a few large private banking concerns, as well as a foreign commercial
bank in which the Soviet Government was interested with capital. All these
credit institutions, however, are now closed.
The State bank, the Industrial bank and the Co-operative bank have
received their capital from the Government, principally out of the balances
of the nationalised values. Among their staff they have a certain number
of experienced bank officials and leading personalities, whom the Govern-
ment chose and selected with care, when it was preparing its monetary
reform.
The Commercial Exchange and the Stock Exchange, which originated
during the first period of the new economic policy, degenerate later on into
purely statistical boards of registration.
The State industry continued to work at a loss, and experienced during
this time, the pressure of the central power which insisted upon a reduction
of demands made on the State budget: the Government attempted to build
up a sort of State budget and began to reduce the subsidies paid to the
industry; the trusts, on their part, begin to compensate themselves for the
lotations from the State, by increasing their prices. In consequence of the
pressure of the taxation screw and of the foreign trade monopoly, an
wrresistable decline in prices for agricultural products begins at the same
lime. Already from the beginning of 1923 arises a strongly marked disparity
of prices between the urban and rural economy, — a new breach between
town and country, — in this instance, in favour of the town. This is the
so-called “price-shears” about the development of which, a detailed analysis
will be given later when speaking about the present state of the Russian
Q 1