the Russians, charging them five per cent, and more. This credit operation alone was considered very profitable in Germany.
The writer has often come in contact with cases in which the German manufacturers were greatly disappointed when some Russian merchants preferred to buy on cash terms. This deprived them of their profits on the discount operation, and they often used every possible means of persuasion to induce the Russians to give them promissory notes instead of cash. And it was not only large firms, with large surplus ot capital, that engaged in these operations. Even small firms, which often had to seek loans themselves, were very anxious to sell on credit. The notes, signed by Russian merchants and bearing interest at the rate of five percent or more, were readily discounted by German banks of exchange, which charged only two or three per cent. It should be noted here, however, that going into bankruptcy is quite common among Russian businessmen. In such cases, as is customary everywhere else, either no payment at all is made on obligations, or else some sort of settlement is effected. Postponement of payments on promissory notes is very frequent.
All this was, of course, well known in Germany and was fully taken into account. Still, it did not deter the German businessmen from going into the Russian field. Their business organizations and associations proved to be an ample defence against such bankruptcy troubles. One of the provisions of the charters of their associations binds all in the associations to refuse selling to any Russian merchant who, through fraudulent bankruptcy, failed to settle satisfactorily his accounts with any German firm. In this way Russian businessmen were compelled to be extremely careful in settling their accounts with the German creditors.
Moreover, German businessmen who traded with Russia were not content with the information concerning financial reliability furnished by the best Russian inquiry offices. They had their own registers, their information being partly based on the personal study made by their representatives in Russia. The German firms were always ready to exchange such information among themselves.
It is very interesting to note that one of the best inquiry-offices concerning the rating of the Russian businessmen was that of Schimmelpfeng, in Berlin. This credit-house developed its activity to such an extent, that, within a comparatively short period of time, it was compelled to establish branches at Petro-
