[15 n|

The Balance of Payments

and

The Foreign Debt of the U.S.S.R.

The foreign financial accounts of the U.S.S.R.
may be divided into three groups :
{a) Movements of merchandise across the
frontiers of the country, and currency incomings
and outgoings directly resulting from these
movements.

{b) Capital movements into and out of the
country.

(c) Various services, movements of labour
and non-commercial transactions.
The balance of payments of the Soviet Union
includes nearly all current items of the nomenclature
 adopted by the League of Nations in
the composition of the balance of payments of
most countries. But the movements of capital
as shown by this balance of payments differ
very considerably from those of other countries,
for in these movements there are no long-term
operations, no amortisation charges for old debts,
all of which have been repudiated by the Soviet
Government, and, inasmuch as foreign capital
markets are closed to Soviet Russia, no new
issues. Movements of capital in the U.S.S.R. consist
first, of an increase in foreign short-term debts
on account of credits raised, and of a decrease
in foreign floating assets on account of short-term
credits repaid; secondly, of the purchase of
foreign currencies and foreign securities in which
the liquid resources of Soviet trading organisations,
and of the Soviet State Bank, are invested ; and
thirdly, of investments in various commercial,

banking, insurance, and industrial institutions
astablished by the Soviet Government in foreign
countries.
Though the balance of payments of the U.S.S.R.
is simple in composition, its calculation is not an
zasy matter. Even the Customs returns of the
movements of goods across the frontiers of the
Soviet Union require many adjustments. We
nave estimated other items on the basis of direct
and indirect evidence procurable from the following
sources : Soviet publications, and unpublished
material in our possession; reports presented
oy the Commissariat of Finance and Commissariat
of Foreign Trade to the all-Russian and all-Union
 Congresses of Soviets ; the annual financial
accounts of the Commissariat of Finance ; estimates
of the balance of payments prepared and pubished
 by the Soviet Trade delegations in England
and Germany; various reports on currency
problems prepared by the Currency Department
of the Commissariat of Finance and by the Moscow
Institute of Economic Research ; and results of a
special investigation on German-Russian trade,
conducted in the Spring 1928, by a Statistical
Commission attached to the Soviet Trade Delegation
 in Berlin, etc.
Since, so far as we are aware, this inquiry is
the first undertaken either in Soviet Russia or
abroad to estimate in full the balance of payments
of the U.S.S.R., we have endeavoured to give a
general financial survey rather than to discuss in
letail separate aspects of the problems involved.