much larger orders than those originally agreed
apon were placed. These orders amounted to
325 million roubles and were guaranteed up to
70%, by the Reichs Government and the German
States.
In the Spring of 1931, the Italian Government
also granted to the U.S.S.R. a new credit amountng
 to 35 million roubles, and this credit was
actually used up by October 1st, 1931. In June,
1931, as a consequence of a special agreement
between the Lord Privy Seal on behalf of the
British Government and the Soviet Trade Delegation,
 Great Britain increased her guarantees by
a further 60 million roubles. The orders to which
these guarantees referred were placed during
the second half of the year 1931. The Polish
Government undertook to facilitate the export of
iron products to Russia in three ways: (1) by
guaranteeing 429, of the bills resulting from these
transactions ; (2) by special credits at cheap rates
granted through the Bank Gospodarstwa to works
executing Soviet orders ; and (3) by the distribution
among producers of a special export bounty,
amounting to 159%, of the price.
During 1930/31, the indebtedness of the U.S.S.R.
to foreign industrial firms increased from 430
million roubles, in the beginning of the year, to
898 million roubles by the end of it. This increase
was the largest of any year and was the more
remarkable in that it coincided with growing
anwillingness of foreign banks to expand unsecured
Russian commitments.
Commercial credits advanced to Soviet Russia
by foreign banks, brokers and industrial suppliers
should, from the point of view of the balance of
pavments. be divided into two groups :

{a) This group is composed of credits which may be
iescribed as real or effective.
The financial facilities involved are twofold: the
irst embraces acceptance and other credits advanced by
sanks for financing imports to the Soviet Union,
md advances extended by banks, brokers and comnercial
 firms for financing the production and delivery
»f exports from the Soviet Union. A net increase of
ndebtedness arising from these credits represents an
:xpansion of currency resources and of foreign investnents,

The second financial facility is in the form of bills drawn
yy foreign industrial and commercial firms selling goods
© the U.S.S.R. and accepted by Soviet trading institutions.
\ net increase of liabilities on account of these trading
sills constitutes an important credit item in the balance
»f payments.
(b) This group of commercial credits which may be
lescribed as contingent liabilities also involves financial
acilities of two kinds. The first consists of export goods
varehoused in foreign countries and pledged with foreign
ranks and brokers. As goods are often exported from
Russia unsold, the ability of Soviet trading organisations
0 pledge stocks accumulated abroad, is of material
issistance to them in meeting current liabilities. But in
sstimating the balance of payments, we must ignore these
redits and regard all goods exported from the country
1s conditionally sold and their total value set down in the
Justoms returns as a net currency income of the country.
The second kind of contingent liabilities relates to
srders placed by Soviet trading organisations but not
ret executed. The supplying firm locks up over a coniderable
 time large investments in raw materials, wages,
stc.,, and therefore justly regards the order even before
t is executed, as an important item of the aggregate
sJbligation. But from the point of view of the balance of
&gt;ayments, such liabilities should be excluded for the
‘edson that so far there has been no actual delivery of
joods or services to the U.S.S.R. Only when the orders
we carried out, the goods shipped and the contingent
iabilities transformed into real debts, taking the form
of trade bills, must they be accounted for in the balance
of payments.
The following table shows the development of
Soviet Russia's foreign commercial debt from
October 1st, 1924, to October 1st, 1931 (in million
roubles) :
REAL DEBT

Acceptance
and other
sank credits
or financing
imports

Advances of
banks,
rrokers, etc.,
to finance
awports

3ills drawn
by foreign
suppliers of
imports

Bank adances
 secured
by Export
goods |
abroad

_iabilities in
connection
with orders
placed and
in state of
execution

Total

Grand
Total

st Oct. 1924 .. 9.0
1925 .. 26.6
926 .. 530
927 .. 60.5
1928 .. 55.0
1920 .. 86.0
930 .. | 1150
1921 050 |

15.0
23.0
25.0 |
30.0
50.0
69.0
30.0 |
Q2 0

54.2
97.6
131.2 |
160.5 |
255.0
260.0
130.0 |
ROR ()

78.2
147.2
209.2 |
251.0
370.0
415.0
625.0
R58 0O

20.0
30.0
15.0 |
300 |
60.0
90.0
101.0
tox n |!

58.0
35.0
51.0
90.0
55.0
110.0
139.0
080

156.2
212.2
305.2
391.0
485.0
615.0
865.0
1 205 O

'y