Loans State, form of economic relations to attract money into the state budget (see Budget, Slate) for a certain period on the basis of credit (see Credit under Capitalism; Credit under Socialism). Loans 207 are divided into internal and external (international), depending on whether they are placed within a given country or abroad; into voluntary or forced, depending on the method by which they are placed; into loans in cash and in kind, depending on the form of repayment; into interest (stable profit in keeping with a fixed rate) and lottery (profit in the form of winnings or prizes), depending on the type of profit; and into short-term (up to one year), middle-term (from one to five years) and long-term (over five years), depending on the redemption term. The content and economic character of state loans are determined by the mode of production. Under capitalism, they are the basic form of the functioning of state credit and the main source for offsetting a state budget deficit. Banks, capitalist companies, government organisations and offices and the prosperous strata of the population are the main holders of loan obligations within the country, the bonds guaranteeing them income derived through taxation of the working people. With the help of loans, which increase the national debt, the national income is redistributed in the interests of the ruling classes. State loans are usually voluntary in character, because the state offers capitalists a profitable capital investment. Forced loans were used, for example, by Nazi Germany during World War II. Under imperialism loans are used to finance the militarisation of the economy, to prepare for and wage wars of aggression Loans are also an instrument for maintaining neocolonialism, and economic and political pressure on other, above all developing, countries. Under socialism, the nature of loans is fundamentally different. Their source is the working people’s savings and their main aim is to mobilise temporarily free money for economic and cultural development and for strengthening the country’s defences in the interests of each individual country and the world socialist community. Loans are of a voluntary, mass and productive nature. As far as their economic content is concerned, they are similar to savings bank deposits. The difference between them is that money belonging to the public is deposited into state loans for a long term, which is, like the order for bond repayment, fixed in advance by the highest bodies of state authority and state administration. These funds are accumulated in the state budget. As for bank deposits, they can be withdrawn by depositors at any moment. Growing socialist accumulation in the economy made it possible to stop the issue of new state loans raised on subscription among the population of the European socialist countries in 1956, and in the USSR in 1958. Bonds distributed among the population of the USSR have been being repaid since 1974. Bonds of state domestic lo’ans are sold freely in the USSR and the other socialist countries.