THE Institute of Economics presents in this
volume the second of its series of studies in the
field of European reconstruction. The book, like
"Germany's Capacity to Pay," published a year
ago, is concerned with analyzing both the fiscal and
the foreign trade problems involved in meeting
huge foreign obligations. The Russian foreign
debt, already enormous as a result of persistent
borrowings for several generations, was more than
doubled during the period of the Great War.
Meanwhile the war and the devastating political
and social conditions which have followed, have
combined to destroy the greater part of the industrial
development achieved in the last generation before
the war, leaving Russia depleted of capital goods
and in need of large additional foreign loans for
reconstruction purposes.

Can loans for Russian reconstruction be safely
extended--assuming a responsible government in
Russia--if that government is also held liable for
the payment of all existing debts? This is the
central economic problem with which the statesmen of
Europe wrestled in vain at the Genoa and The Hague
conferences of 1922; it remains the unsolved eco-
nomic problem presented by Russia. This book is
essentially a study in investment credit analysis,

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