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World War II -- American Investments and business in the Soviet Union country trends
American Companies: Investments and Business Activities in the Soviet Union--Country Trends
Figure 1.--Various American companies were actuve in the Soviet Union before World War II. Oil was one area of involvement. The Universal Oil Products Corporation (UOP) no longer exists as a separate entity (it is now part of Honeywell), but after World War I it became the target of major legal action among American oil giants as it developed important refinery products and technologies that proved of immense importance during World War II. One of these was solid phosphoric acid as a catalyst to stimulate even higher yields of gasoline from crude oil. This was followed by work in hydrofluoric alkylation, polymerization and isomerization. These developments led to the development of high-octane fuels that could be produced on a large scale, as well as for the production of synthetic rubber. Here we see a UPPC engineer arriving in New York returning from the Soviet Union after the out break of World War II. The Soviets at the time had become a NAZI ally. The Americans working in Russia did not find the worker-peasant paraduce trumpeted by left-wing groups in America. The press caption read, "Russ Food Scarce Says Engineer: Mr. and Mrs. Hugh Rodman of Chicgo as they arrive in New York this morning aboard the 'S.S. Washington' with their son, Hugh, and daughter, Elizabeth. Rodman, an engineer employed by the Universal Oil Products Company of Chicago went to Russia in '38 to build an oil refinery in a toiwn 500 miles east of Moscow. Rodman reported the food supoly for Rssian wirkers extremely bad, with the average laborer paid only $5.34 a month." The photograpoh was dated February 8, 1940. Note the reference to the Soviet food situistion. At the time, the Soviets were supporting the NAZI war machine, shipping vast quantities of grain and other critical war materuals such as oil to their NAZI ally.
The Bolheviks who seized power in Russia firmly believed thst they were waging a world wide revolution against capitalism (1917). They were shocked thst their success occured in backward Russia, a country with a popultion dominated by the rural peasantry. Marxist ideology projected that the Revolution would come in Western countries with a fully developed industrial proleterit. From the beginning, the Bolsheviks began promoting subversise actions in capitlist targets. Germany was a priority target. Bolsheviks conspiratal attitudes were intendified when the Allies began intervening in Russia. This was never a major effort or well coordinsted. The United States effort was primsrily focused on preventng arms and supplied sent to the Tsarist Giovernment and then the Provisional Government from reaching the Bolsheviks. Actually the primary American effort after the Revolution was to prevent Russians from starving. The combination of the Civil War and Bolshevik barbarity resulted in a terrible famine also known as Povolzhye famine in which some 5 million Russians died, primarily because the Bolsheviks would not accept American hunmanitarian food relief. Had they not finally relented under international pressure many more Russians would have perished. As a result, of Bolshevik Markist economic policies, factories stood idle and farm production lagged. Lenin of all people began to grasp that and introduced the New Economic Policy (NEP), essentially market reforms meaning capitalism. The NEP violated fundamental principles of Markism everything in which the Bolsheviks believed. It was becoming obvious that that Communism with its socialist, planned economic system did not work. This would be undone by Stalin after Lenin's death. Stalin and his NKVD manged to hide the dreadful Ukranian famine. As a result, some in the West actually began to think of the Soviet Union as a worker and peasant paradice. This was especially the case as the Depression wreaked havoc on the Western economies. Socialism began to attract people in both Europe and America. Socialist parties began winning elections in Europe and Communist parties began to attract considerable suoport. Western businessmen began signing contacts with the Soviets. [Fitch] Some of the individuals involved were Averell Harriman, Armand Hammer, and Henry Ford. One of the first was W. Averell Harriman who negotiated a concession agreement with
the Soviet Union to mine the manganese deposits of Tchiatouri, Georgia (1924). Hammer with more success helped the Soviet oil industry. Ford helped open tractor factories. Commercial ties developed between the Soviet Union and the United States, establishing the basis for further cooperation, dialogue, and diplomatic relations between the two countries. Stalin eradicated vestiges of capitalism. He was practical enough, however, to accept the assistance of corporaions with financing and technology. European countries began recognizing the Soviet Union. The Roosevelt Administration regognized the Soviet Government (1933).
Russian Revolution (1917)
The Bolheviks who seized power in Russia firmly believed thst they were waging a world wide revolution against capitalism (1917). They were shocked thst their success occured in backward Russia, a country with a popultion dominated by the rural peasantry. Marxist ideology projected that the Revolution would come in Western countries with a fully developed industrial proleterit.
Promoting Revolution (1917)
From the beginning, the Bolsheviks began promoting subversise actions in capitlist countries. Germany was a priority target. Strikes and open revolt foillowed in Germany, especially Berlin. Communisdts managed to seuze control of Bacaria. There was even a brief seizure of Hungary.
Bolsheviks conspiratal attitudes were intendified when the Allies began intervening in Russia. This was never a major effort or well coordinsted. The United States effirt was primsrily focused on preventng arms and supplied sent to the Tsarist Government and then the Provisonal Government from reaching the Bolsheviks. Foreign governments intervened in Russia, hopeing that it was still possible to assist the Russians in reopening a front in the East. The British landed a small British force was landed at port of Murmansk with the consent of the local soviet (March 1918). Stockpiles of supplies existed there had been deliverec to the Russians. The Japanese landed forces landed at Vladivostok without securing any approval (April 5). The Bolsheviks engaged the British at Murmansk who landed additional forces at Arkhangelsk (August 1918). The Japanese proceeded to heavily reinforce their forces at Vladivostok. These forces were on the perifery of Russia. The Armistice in the West (November 1918) changed the complexion of these interventions. Reopening an Eastern Front was no longer necessary. The Allies now had to decided if they wanted to intervene in the Civil War. The French after the Ottoman armistice opened the Black Sea began landing forces in the Ukraine (December 1918).
Actually the primary American effort after the Revolution was to prevent Russians from starving. The combination of the Civil War and Bolshevik barbarity resulted in a terrible famine also known as Povolzhye famine in which some 5 million Russians died, primarily because the Bolsheviks would not accept American hunmanitarian food relief. The American relief mission to Russia like the effort in Europe was overseen by Herbert Hoover. As terrible as the Civil War was, the loss of life could have been much worse. The American Relief Administration (ARA) had offered Russia food relief in 1919 along with the rest of Europe, despite the Bolshevik takeover. The Bolsheviks rejected the offer because of the terms involved. The ARA insisted that an American overseer was to be in charge of all food stations to ensure that the food was not distributed on a political or religious basis. The Bolsehvicks in 1921 changed their minds. Faced with a severe famine as a result of their Civil war and a severe drought, the Bolsheviks eventually accepted the American terms. The publicity campaign waged by Eglantyne Jebb and her Save the Children Fund helped shame the Bolseviks into saving their own people. When a critic inquired if he was not thus helping Bolshevism, Hoover retorted, "Twenty million people are starving. Whatever their politics, they shall be fed!" As in Europe, American food again played a role in saving millions of children and adults (1921-22). One author claims that the American food deliveries may have even saved the Bolshevik regime.
New Economic Policy (1921-28)
The Russian economy inckluding the agricultural sphere was devestated by first World War I (1914-18) and then the Civil War (1919-21) which followed the Revoultion.
As a result, of Bolshevik Markist economic policies, factories stood idle and farm production lagged. Lenin of all people began to grasp that and introduced the New Economic Policy (NEP), essentially market reforms meaning capitalism. The NEP violated fundamental principles of Markism everything in which the Bolsheviks believed. It was becoming obvious that that Communism with its socialist, planned economic system did not work. Lenin adopted the New Economic Policy (NEP) to get the economy functioning again (1921). Soviet War Communism, the seizure of factories and other productive facilities caused further disruptions. The NEP was designed as a temprary porogram to reintroduce limited private owenership back into the Soviet economy. The NEP was a considerable success. The fact that it resulted in increased production and relatibe prosperity does not seem to have ebntered into Stalin's thinking. Stalin who was gaining control of the Party and Soviet state had other goals in mind, namely the absolute control of the Soviet economy and rapid industrialization. This would be undone by Stalin after Lenin's death. Stalin replaced the NEP with the First Five Year Plan (1928).
Worker and Peasant Paradice
Stalin and his NKVD manged to hide the dreadful Ukranian famine. As a result, some in the West actually began to think of the Soviet Union as a worker and peasant paradice. In actuality, Stalin launched a murderous assault on the Soviet peasantry. Stalin's murderous campaign in the Ukraine was a deadly genocide.
Socialism in the West
This was especially the case as the Depression wreaked havoc on the Western economies. Socialism began to attract people in both Europe and America. Socialist parties began winning elections in Europe and Communist parties began to attract considerable suoport.
Western businessmen began signing contacts with the Soviets. [Fitch] Some of the individuals involved were Armand Hammer, Averell Harriman, and Henry Ford. A young Armnd Hammer was the first American businessman to become involved in the Soviet Union. While waiting for a planned internship to begin at Bellevue Hospital, Hammer went to the Soviet Union for a short business trip. It would begin a odessy that would last untik 1930. He did not pursue a medical career, but liked being called 'Dr. Hammer'. Hammer's business activities in the Soviet Union are a matter of come controversy, but his initial business objective seems to have been put on hold by the immensity of the jnfolding food criis and famine. He helped sell wheat desperatly needed by the starving Russians. [Weinberg, p.43.]
Next came W. Averell Harriman who negotiated a concession agreement with the Soviet Union to mine the manganese deposits of Tchiatouri, Georgia (1924).
The Ford Motior Company which would become a target of American workers began exploratory visits and negotiations in the Soviet Union (1927). An agreement to produce cars, trucks, and factories was signed (1929). The Soviet Unionhad only 20,000 cars and a single truck factory at the time. The Soviets were eager to expand motor vehiche production, not so much cars, but trucks and tractors were high on heir agenda. Stalin at the time was just bginning his brutal collectivization process and assumed that along with imprived techhnology such as tractors, production from the collectives would substsntilly increase the output of peasant agriculture. In fact Soviet agriculture never recovered. Ford with its engineering and manufacturing capabilities was an obvious choice. Ford would oversee construction of a plant at Nizhni Novgorod, along the Volga River, to manufacture Model A cars. An assembly plant would be opened in Moscow.
American engineer John Walter Christie creating a design for a fundamentally new and effective tank for the U.S. military (1920s). The poorly funded U.S. Army showed little interest. A Soviet trade delegation met Christie while touring European and American armaments plants in search of new armored vehicle technology. This would eventually lead to an important feature of the iconic T34 tank of World War II.
Only limited commercial ties developed between the Soviet Union and the United States. Stalin was hard at work eradicating the vestiges of capitalism in the Soviet Union and promoting espionage and subversion in the West. He was practical enough, however, to seek the assistance of corporaions with financing and advanced technology. European countries began recognizing the Soviet Union. The Roosevelt Administration regognized the Soviet Government (1933). Mired in the Dpression, the Roosevelt Administration was interested in the possibility of large-scale trade with Russia and hope for some repayment on the old Tsarist debts. Negotiated with the Soviets with the Soviets went nowhere. The Soviets promised there would be no espionage, but actually expanded thir efforts. There were some contracts signed, mostly the Sioviets seekin American technology. We note American companies continuing to work on Russian projects (1938). Here an American oil engineer working for the Universal Oil Products Corporation is returning from Russia after the out break of World War II (figure 1).
Of course the American involvement in the Soviet Union did not end with World War II. After nearly 2 years as an ally, Hitker turned n his ally Stalin and invaded the Soviet Union (June 1941). The Red Army was sent realing and NAZI armies approached Moscow. The U.S. Congress had approved thvLend Lease Act to aid Britain (March 1941). The Roosevelt Administration extended aid to all countries fighting the Axis powers. Britain and the Soviet Union would be the two principal recipienrts. Vast quantities of rms, munitions, food, and critical war material would flow to the Soviet Union, although getting the shipments through to the Soviets was much more difficult than to Britain. The Soviets nearly matched German output, but was substantially reduced by German military successes (1941-42). The American economy was, however, more than twice the size of the German economy and overwealmed the German war industry.
At the time of the NAZI surrender (May 1945) there were millions of Soviet citizens being held against their will in Germany. German victories beginning with Operation Barbarossa (1941) took vast numbers of Soviet POWs. Various sources suggest 3-6 million Soviet POWs. Many died during the firstr winter through deliberate starvation and exposure. When a labor shortage development, the Germans somewhat improved conditioned (1942) so about half of the Soviets POWs survived and were being held in Reich camps. In addition, as the labor shortage developoed, millions of Soviet workers were rounded up and shipped to the Reich as slave labor. Most were teenagers and young women. This was more than an additional 2 million people. They were not treated as harshly as the POWs, but the arrest and transport was brutal and many arrived in poor health. And they were not well cared for in the Reich. American aid groups like the Red Cross attempted to assist both groups with food and clothing. Many were in desperate condition when Allied authorities got to them.
Lend Lease ended with the official Japanese surrender (September 2, 1945). America no longer sw a needto supply militaryequiment, especially to the Sovier Union given its behavior in Germany as part of the four-power ocupation. Lend Lease was, however, not just about military euipment and supplies. America had shipped vast quantities of food to the Soviet Union as part of Lend Lease. And even with the end of the War, the need for food aid did not suddenly change. The Germans had been driven from the Soviet Union, but the damage they did was incredible: people killed, villags burned and farm inrastructure destroyed. The Soviet Union had enormous agricultural potential, but the damages combined with the inefficient collectives meant that it wold be some time before the Soviets could meet domestic demand, let alone fully utilize the potential of some of the richest farm land in the world. And America food shipments did not stop. A third American effort to save millions of Russians had come into existence. President Roosevelt had begun using the term 'United Nations' before the United Nations organization even existed. At the time, the erm meant countries fighting the Axis tryranies. One U.N. agency was created before the United Nations itself--the United Nations Relief and Rehabilitation Administration (UNRRA). The situation for civilians in the captive nations was intolerable. Some managed to escape and as the Allies began to liberate them, UNRRA was tasked with providing relief. And this included the Soviet Union and the captive nations in Eastern Europe. While UNRRA was a U.N. agency almost all the financing as well as the food and other relief supplies came from the United States.
Sources
Fitch, Stephen D. "The Harriman manganese concession in the Soviet Union: Lessons for today," Berkeley Journal of International Law Vol. 9, Issue 1 Summer, Article 5 (1991).
