Actually they are often much less than that figure,
a circumstance which is responsible for the extraordinary
 stringency and difficulties marking the
financial accounts of the USS.R. in foreign
countries.
Foreign capital invested in Soviet Russia
consists of long-term investments in concessions
and short-term credits in foreign trade.
Investments of the first character were limited
to a dozen concessions. In no instance was the
amount invested very large, and most of the
enterprises concerned are now in liquidation. The
movement of short-term money in the financing
of Soviet foreign trade remains, therefore, the
only really important part of foreign investment.
Credits are extended to Soviet Russia in nearly
all forms known to financial practice. On the
other hand, the Soviet trading organisations which
conduct abroad a retail trade in some raw materials,
for instance, oil products or marketing various
industrial goods, have to extend credits to their
purchasers. These credits are not large, but must
be taken into account.
Financing of Soviet trade takes two main
forms : (a) acceptance credits extended by foreign
banks and brokers, and (b) trade credits extended
by foreign suppliers.

BANK AND BROKERS’ CREDITS.
Acceptance credits are granted directly to the
Soviet purchasing undertakings or to Soviet banks
abroad.
Credits of this kind were first extended to Soviet
Russia by English and American banks in 1922. In
the beginning of 1923 acceptance credits amounted to,
approximately, 15 million roubles, but they were either
secured by goods warehoused abroad or by deposits of
foreign currency. Consequently, from the aspect of the
balance of payments, they did not constitute a credit item.
During the period 1922/30, many of the chief banks in
London, Berlin and New York became more and more
involved in financing Russian imports, the result being
that acceptance credits increased considerably. Such
credits are usually unconfirmed and revokable. Foreign
banks financing Soviet purchases in this form often require
Soviet clients to keep their deposits or current accounts
in a fixed ratio to their debit balances, apart from which
they charge a special acceptance commission, usually
exceeding the commission charged to continental banks
of good standing. This commission is on the average 39,
per annum, compared with § to 1%, the customary rate
for continental banks.
In 1923/24 the total indebtedness to foreign banks
on account of acceptance credits reached a substantial
figure, but the greater part remained secured by deposits
of foreign currency or of foreign government bonds. The
net indebtedness on October 1st, 1924, did not exceed 9

nillion roubles. In 1924/25 the English and American
yanks agreed to extend acceptance credits against deposits
amounting only to 509, (and in some cases less), of outstanding
 debit balances. In Autumn, 1925, the Deutsche
Bank and the semi-state Reichskreditgeselischaft granted
the Soviet Trade Delegation, and the Soviet Guarantie
ind Credit Bank fur den Osten G.m.b.H. in Berlin, credit
ymounting to 75 million marks for the purpose of financing
Soviet purchases in Germany up to 100 million marks,
partly in cash and partly in the form of re-discounting
Soviet bills. Certain foreign banks also agreed to extend
acceptance credits against a deposit consisting of bills,
irawn by one Soviet trading organisation and accepted
oy another, and in a few cases even agreed to discount
much bills. All these credits increased considerably during
ater years, and became an important item in the foreign
‘hort-term indebtedness of the U.S.S.R.
In 1925/26 foreign banks in collaboration with brokers
segan to finance exports from Soviet Russia not only by
means of credits, against Soviet goods deposited abroad,
Hut also of advances, relatively small in the beginning,
»ut substantial later, against telegraph communication
rom the Soviet State Bank that goods up to a certain
ralue were ready for despatch. In 1927/28 several German
ind English banks and firms of brokers agreed to finance
‘he production of timber, grain, bristles, manganese and
butter and the collection of furs, and various other goods
by advances secured, sometimes by goods warehoused in
‘he U.S.S.R. and often by bills bearing only Soviet sig-1atures,
 But such credits were insured by the banks or
brokers concerned with foreign insurance companies, or
by adequate capital reserves previously built up.
In balancing Soviet Russia’s financial accounts
with foreign countries, credits of this kind began
to play an increasingly important part. But the
‘nsecurity of Russia's political and economic
situation left a peculiar mark upon their growth.
The total indebtedness to foreign banks and
brokers, not taking into account those credits
secured by goods warehoused abroad amounted on
October 1st, 1926, to 53 million roubles for
‘mports, and 25 million roubles for exports. From
‘he first half of 1927/28 very large credits were
advanced by foreign banks and brokers against
timber exports. The total amount of such credits
n the Spring, 1928, was 41.6 million roubles against
18 million roubles in the Spring of the previous
year; in the same period of 1929 the foreign
capital invested in financing timber exports from
Russia reached 60 million roubles.
The growth of foreign credits received a
decisive check in April-June, 1928, when in view
of the political and economic situation in Russia,
English, German and American banks decided to
restrict their Russian commitments. A further
increase took place in the second half of 1928/29,
when numerous banking houses, merchant bankers