In the table we have estimated that the total
amount of credit extended to Soviet trading and banking
organizations in Great Britain and to the Soviet State
Bank, including credits secured by marketable commodities,
amounted to about 30-31 million pounds on October 1st,
1930, and remained on the same level in 1931.
But there is a large indebtedness which can be estimated
only approximately, consisting mostly of credits granted
by the City of London to Germany, Poland, Czecho-Slovakia,
 Latvia, Austria and Italy, and used by these
countries for their exports to the U.S.S.R. The amount
of bills drawn on Soviet Russia in sterling and made payable
 in London by industrial and trading firms of the
countries mentioned, amounted in October, 1931, to 10
to 12 million pounds, and there is little doubt that these
bills found their way to the London discount market.

There are many other ways in which English credit is
used by various countries, more particularly by Germany,
to finance exports to Soviet Russia. We assess the total
amount of English capital invested in the financing of
Russian foreign trade on October Ist, 1931, at 45 million
pounds, which can be considered as an under estimate
rather than an over estimate.

Compared with pre-revolutionary short-term indebtedness,
 this figure has significance. According to calculations
 undertaken by the Institute of Economic Research
attached to the Soviet Commissariat of Finance, the total
amount of English long-term capital invested before the
revolution in Russian industry, trade and banking (shares
and debentures) amounted to 52.3 million pounds. The
amount of short-term industrial and trading credit extended
to Russia by Great Britain was estimated by the Ministry
of Finance for the year 1911 at 4.3 million pounds, and the
amount of bank credit at 10.2 million pounds, including
2.9 million pounds granted to the Russo-Asiatic Bank, and
2.1 million pounds to the Russo-Commercial and Industrial
 Bank (London branches). Thus the total amount of
English capital (excluding the State, Municipal and Railway
debts) in Russian industry and trade before the war,
amounted to 66.8 million pounds, consisting of 52.3
million pounds long-term investments and 14.5 million
pounds short-term credits.
It is a remarkable fact that although English investments
 were substantial, they facilitated to a very small
extent British exports to the U.S.S.R. During 1930,
these exports did not exceed the sum of 6.5 million pounds.
Credits are only in part necessitated by Soviet imports
to Great Britain. These imports consist mostly of grain,
butter, timber, oil, and of certain kinds of goods produced
from raw materials, the manufacture of which does not
involve any foreign credits because the whole process is
financed from resources available in the Soviet Union.
Although credits extended take the form of brokers’ and
banks’ advances and are formally designed to finance
production, delivery and marketing of the commodities
mentioned, foreign currency is needed for that purpose
only to a limited extent, and the bulk of British credits is
actually used to pay off the maturing bills drawn by
German, Austrian, Czech, Polish and other suppliers,
and made pavable either in London or in other countries.

GERMANY.
Germany began, financing exports to the U.S.S.R.
rarly in 1923/24. During that year out of credits extended
9y twelve countries and amounting to 61 million roubles.
sermany contributed 24 million roubles. The average
luration of her credits was 10 months, and those of other
~ountries not more than 6 to 7 months.
From the start trade with Russia became the concern of
arge industrial undertakings. Early in 1925, a group of
vell-known firms which included Hugo Stinnes, A.E.G.,
3ergmann Elektricitatswerke Chemische Fabrik auf
\ktien, Deutsche Werke, Friedr, Krupp, Siemensschuckert
 Werke and Otto Wolff, together with two
‘arge banks and a prominent financial house, established
v special Corporation called ‘‘Ausfuhrvereinigung Ost,
&gt;.m.b.H.,” which advanced to the Soviet Trade Delejation
 in Germany, a credit amounting to 20 million
marks. This corporation was set up to facilitate the financing
&gt;f German exports to the Soviet Union, and to create
for that purpose a technical medium more acceptable to
the international money market than long-term Soviet
sills. Each participating firm was entitled to deposit
with the Corporation its Soviet bills, the duration of which
was not to exceed 15 months, and to draw upon the
Corporation its own bills to an equivalent of the face value
of the deposited bills. The bills thus accepted were usully
 discounted by banks and financial houses associated
vith the Corporation, who in turn could re-discount them
vith the Reichsbank should necessity arise.
In the same year another Corporation called the
Deutsche Industrie-Vereinigung fur den Osten, G.m.b.H.,,
‘Divo,” was organised by a group of industrialists in Baden,
wogether with a few credit institutions in Southern Germany,
ind advanced to the Soviet Trade Delegation a credit of
16 million marks. This undertaking was of an exceptional
tind, for while financing exports to Russia, it participated
n the placing of orders and in the distribution of profits.
[he Soviet Trade Delegation disapproved of its activities.
and only a small proportion of its credit was used.

In the Autumn of 1925 the Deutsche Bank, together
with the semi-state Reichskreditgesellschaft, arranged
another credit amounting to 75 million marks for financing
sxports to the U.S.S.R. It was contemplated that German
ndustrial firms should contribute an additional 25 million
marks. The transaction was effected in the following
vay: 509, of the invoice value was paid out in cash
oy the German banks to German suppliers, 25%, being
ised through the Soviet Garantie-und Kredit Bank fur
len Osten. This bank discounted the bills which were
resented to it by suppliers, and re-discounted them with
he Deutsche Bank and the Reichskreditgesellschaft.
The credit costs for the Soviet trading organisation reached
3.3% per annum, and orders were placed to an amount
10t exceeding 66 million marks. A feature of this credit
vas that in many cases, the money was actually paid back
Oy Soviet organisations almost before the German goods
urived in the U.S.S.R. According to the terms of the
\greement, repayment of the total amount was fixed for
February 1926, regardless of the actual date of the shipnent
 of the goods. As placing of orders was frequently