a week... The peasants refuse to sell anything whatsoever for the Soviet 
rouble. Every peasant and worker knows now that we shall have to burn 
this Soviet rouble...” (“Pravda”, March 2, 1924). The reform by Kutler, 
Urovsky and Sokolnikov has at first produced a fairly respectable monetary 
value, but after all, it did not possess the elements of stability which are 
necessary for a really stable monetary standard, viz., in creating an increase 
‘n the national income, a budget without a deficit, a security based on a 
gold standard — even if only partially secured, yet having an unmistakeable 
yuarantee, — and also having a connection with the international money 
market. The ephemeral character of the stability of the Cherwonez in 
connection with the existing organisation of the national economy, showed 
itself at first in 1925. In the chapter about the Currency, this matter is 
treated in a more exhaustive manner. 
For the first time after the proclamation of the new economic policy, 
foreign capital was again admitted into the country. The formal possibility 
of coming to an agreement with Western European Powers for mutual 
economic co-operation, was proclaimed on October 28, 1g2r (Chicherin’s 
note). The penetration of foreign capital into Russia, happened first through 
such business men as had come into prominence by post-war speculation. 
Only in 1921, accredited and well-established firms began to approach the 
Soviet Government with proposals on the basis of concessions for working 
the mineral resources of the country. If was presumed that a written 
agreement with the Government would be amply sufficient in order to 
establish favourable conditions for the work in Russia. The glaring differ- 
ences of legal and social conditions in Soviet Russia compared with the rest 
of the world, and the important practical significance of these differences 
soon became clear to those seeking for concessions, but, nevertheless, not 
before the actual inception of the work. Even for the exploitation of the 
least difficult licensed undertakings (working of timber materials, export 
of manganese-ore), even these at once showed in practice, the absolute 
impossibility of carrying on the enterprises with profit while such specific 
*conomic and legal conditions prevailed in the country. 
Even the attempts of foreign capital to organise trade with Russia, 
produced no important results. The Soviet Government permitted the so- 
ralled “Mixed Companies”, in which it had a share and exercised the 
control. However, the development of these companies was soon checked by 
the inability of conferring direct with the purchaser, and hampered by the 
lack of a safe system of extending credit, and by finding their work confined 
> supplying purely State undertakings and so-called co-operative enterprises 
with goods. The warehousing of goods for agricultural purposes (agri- 
cultural small implements) was ineffective, in spite of the active demand 
for these articles; the peasant is too poor to buy foreien implements for 
“5