and co-operative banks replaced the big credit
institutions in England and other countries in
financing Soviet Russia’s foreign trade. On October
1st, 1930, the total of import and export credits
reached its peak, amounting to 195 million roubles.
The manner in which the Five Year Plan was
carried out during 1930/31, and the growing
uncertainty of the situation, induced most banking
institutions abroad, including those which had
joined more recently in the financing of Soviet
trade, either to contract in part their Russian commitments
 or to demand additional security in the
form of foreign currency or gilt-edged securities.
The timber season that year was financed on a
much smaller scale than usual, manganese credits
were considerably decreased, and even the financing
of the export of furs (a most remunerative transaction)
 was greatly reduced. The German crisis
of the middle of 1931 added to the difficulties of
the situation, and many London banks, with large
German commitments, began to contract the credits
extended to Soviet Russia.
On October 1st, 1931 the total indebtedness
of the Soviet Union to foreign banks and brokers
was 157 million roubles (excluding goods available
abroad), and was 38 million roubles less than on
October 1st, 1930.
SUPPLIERS’ CREDITS.
The chief source of finance for foreign trade and
the balancing of accounts with the outside world
is credit advanced by foreign industrial suppliers.
In financing Soviet Russia the interested firms
were called upon to : (1) eliminate, diminish or
shift upon others the so-called “Russian risk’ ;
(2) provide the necessary capital. The first
condition was partially fulfilled ;by Government
guarantees. An attempt was made to fulfil the
second condition by creating special banking
concerns which frequently had the backing of
semi-state financial institutions; by the use of
3 months renewable bills in place of long term bills ;
by the substitution of bills bearing foreign signatures
 for those bearing Soviet signatures; and
by the creation of special financial institutions
at the instigation of foreign banks and [industrial
firms in which the latter could deposit long-term
Soviet bills and draw 3 months renewable bills up
to an amount equivalent to their face value.

All these methods opened the world short-term
noney market to Soviet Russia, and were largely
responsible for the not inconsiderable increase of
her foreign indebtedness on account of bills outstanding
 to foreign suppliers. In 1923/24, the Soviet
Trade Delegations in twelve countries placed
orders amounting to 208.5 million roubles and
received credits of six to seven months duration
for 61.5 million roubles. In 1925, many English
and German concerns started financing Soviet
imports on a larger scale, a detailed analysis of
which is given in Appendix No. 2. In 1926,
American industrialists joined the English,
German and Czecho-Slovakians in financing Soviet
Russia’s imports, and her indebtedness rose from
131.2 million roubles on October 1st, 1926, to 255
million roubles on October 15th, 1928. In the
succeeding two years her indebtedness under the
original German Government guarantee diminished ;
it stood at 61 million marks on October 1st, 1930.
But new guarantees were given in Germany under
‘he General Export Guarantee Scheme. The inlebtedness
 to the suppliers in Great Britain
‘ncreased from 22 million roubles on October Ist,
1928, up to 43 million roubles in 1929 when the
Export Credit Scheme was extended to Soviet
Russia, and to 77 million roubles in 1930. During
the last two years, credits of short duration
were obtained in the United States, France,
Austria, Czecho-Slovakia, Poland, Italy,
Denmark, Norway, Latvia and Finland. In all
these instances, with the exception of the United
States and France, special government guarantees
or general export guarantee schemes were extended
to Soviet Russia.
In August, 1930, the Italian Government
undertook to guarantee 759%, of the value of Soviet
orders placed from July 1st, 1930, to June 30th,
1931, up to a total of 200 million lire (20 million
roubles).
In April, 1931, a group of German industrialists
signed an agreement with the Supreme Economic
Council according to which Soviet Russia was
assured of credit extending on the average to 21
months for orders amounting to 146 million
roubles. Although not a party to this agreement,
the German Government gave a tacit promise of
2 guarantee. Actually up till October, 1931,