Last vear Soviet Russia’s real debt increased
by 230 million roubles, or, if we include contingent
liabilities, by 840 million roubles. Her whole
indebtedness increased two and a half times since
the introduction of the Five Years Plan, and on
October 1st, 1931, her real debt equalled the value
of exports for 1930/31 and, if contingent liabilities
be included, exceeded it by nearly 50%.
INTEREST ON SHORT-TERM CREDIT ABROAD.
The interest charges on the Soviet short-term
debt are an important item in the ‘balance of
payments.
The interest due to industrial suppliers should be
added to the invoice price.
It is necessary, of course, to bear in mind that interest
charges do not represent all credit costs charged to Soviet
purchasing organisations by foreign suppliers. These
foreign suppliers when selling goods to Russia are involved
in a financial transaction which in reality does not present
any material security. They are compelled, therefore,
to secure their capital: (1) by asking their own governments.
 to take over a part of the risk involved; (2) by
applying to a private insurance company for an indemnitying
 policy ; (3) by selling the Soviet bills to bankers
or on the free market “without recourse ”’; (4) by building
 up special capital reserves to provide for any emergency.

III. FOREIGN LABOUR AND
Foreign labour employed in Soviet Russia may
be divided into three groups: (1) seasonal unqualified
 workers; (2). foreign engineers and
technicians sent by foreign firms to supervise the
installation of machinery produced by them; and
(3) foreign specialists, technical and otherwise,
with whom contracts are made for definite periods.
Seasonal unqualified labourers come from
China and Persia. In 1925/26 their number
amounted to 30,000, a total which, according to
our information, has been exceeded during each
of the last three years. When leaving the U.S.S.R.
they usually take back with them an unexpended
part of their wages. It is estimated that this
amounts to 2.5-3.5 million roubles. But the
greater part of this debit item of the balance of
payments is represented by the remittances abroad
made by the second and third groups.
Whether the cost of installing machinery ordered
abroad is borne by Soviet Russia or by the foreign firm,
depends upon the terms of the contract concluded, Such

All these credit charges are usually included by suppliers
in the prices, and are consequently represented by the
figures of the Customs returns.
With regard to the interest charges on credits extended
by foreign banks and brokers the position is different.
They are not, and could not for technical reasons, be
included in the price of imports or excluded from that
of exports, and usually substantially exceed established
rates. They consist of the following: (1) official discount
ate; (2) acceptance commission; (3) in the event of
credits being insured, insurance premiums; (4) stamp
iuties and different banking charges. In most cases
‘he credits extended by brokers are insured by private
sompanies at a rate of from 6 to 10%, per annum ; timber
=redits given by banks are also insured ; and when acceptance
 credits are secured to a certain extent by currency
jeposits, a commission of 39, per annum is paid on the
sredits.
The average costs of bank and brokers’ credits
fluctuated in the last 10 years from 15—189,
per annum for credits insured with private
assurance companies, and amounting for the
whole to an average of 10 to 12%, per annum.
This rate depends largely upon the economic and
political situation in the U.S.S.R., the general
policy of the Soviet Government with regard to
foreign enterprise, and the state of international
money markets.

TECHNICAL ASSISTANCE.

ost might be included in the price of the goods, and,
consequently, covered by the Customs returns, or, as is
usually the case, a special account might be presented
for payment to Soviet organisations and appear as a
separate debit item. Should the foreign firm instal
nachinery at its own cost, such cost represents a credit
‘tem in the balance of payments.
The employment of foreign experts began on
a large scale in 1926/27, when the Soviet Government
 definitely adopted a policy of industrialisation.
The German experts were the first to be engaged,
‘ollowed by American and to a lesser extent by
English and Italian technicians. In 1926/27.
according to the Soviet Trade Delegation in Berlin,
the total amount paid to Germany for the services
of specialists. did not exceed 2,160,000 Reichsmarks.
 But since then the sum paid on this account
greatly increased. According to our information
the total number of foreign specialists employed
by the Soviet Government in 1929/30, averaged
2,950 and in 1930/31, 4,140, apart from a number
of foreien workers who are not under contract.