6,964 words
My last article documented the
funding of the March 1917 Revolution in Russia.[1] The primary financier of the
Russian revolutionary movement 1905–1917 was Jacob Schiff, of Kuhn Loeb and
Co., New York. In particular Schiff had provided the money for the distribution
of revolutionary propaganda among Russians prisoners-of-war in Japan in 1905 by
the American journalist George Kennan who, more than any other individual, was
responsible for turning American public and official opinion against Czarist
Russia. Kennan subsequently related that it was thanks to Schiff that 50,000
Russian soldiers were revolutionized and formed the cadres that laid the basis
for the March 1917 Revolution and, we might add–either directly or
indirectly–the consequent Bolshevik coup of November. The reaction of
bankers from Wall Street and The City towards the overthrow of the Czar was
enthusiastic.
This article deals with the funding of the subsequent Bolshevik coup
eight months later which, as paradoxical as it might seem to those who know
nothing of history other than the orthodox version, was also greeted cordially
by banking circles in Wall Street and elsewhere.
Apologists for the bankers and other highly-placed individuals who
supported the Bolsheviks from the earliest stages of the communist takeover,
either diplomatically or financially, justify the support for this mass
application of psychopathology as being motivated by patriotic sentiment, in
trying to thwart German influence over the Bolsheviks and to keep Russia in the
war against Germany. Because Lenin and his entourage had been able to enter
Russia courtesy of the German High Command on the basis that a Bolshevik regime
would withdraw Russia from the war, Wall Street capitalists explained that
their patronage of the Bolsheviks was motivated by the highest ideals of
pro-Allied sentiment. Hence, William Boyce Thompson in particular stated that
by funding Bolshevik propaganda for distribution in Germany and Austria this
would undermine the war effort of those countries, while his assistance to the
Bolsheviks in Russia was designed to swing them in favor of the Allies.
These protestations of patriotic motivations ring hollow. International
banking is precisely what it is called–international, or globalist
as such forms of capitalism are now called. Not only have these banking forms
and other forms of big business had overlapping directorships and investments
for generations, but they are often related through intermarriage. While Max
Warburg of the Warburg banking house in Germany advised the Kaiser and while
the German Government arranged for funding and safe passage of Lenin and his
entourage from Switzerland across Germany to Russia;[2] his brother Paul,[3] a
partner of Jacob Schiff’s at Wall Street, looked after the family interests in
New York. The primary factor that was behind the bankers’ support for the
Bolsheviks whether from London,[4] New York, Stockholm,[5] or Berlin, was to
open up the underdeveloped resources of Russia to the world market, just as in
our own day George Soros, the money speculator, funds the so-called “color
revolutions” to bring about “regime change” that facilitates the opening up of
resources to global exploitation. Hence there can no longer be any doubt that
international capital a plays a major role in fomenting revolutions, because
Soros plays the well-known modern-day equivalent of Jacob Schiff.
Recognition of Bolsheviks Pushed by Bankers
This aim of international finance, whether centered
in Germany, England or the USA, to open up Russia to capitalist exploitation by
supporting the Bolsheviks, was widely commented on at the time by a diversity
of well-informed sources, including Allied intelligence agencies, and of
particular interest by two very different individuals, Henry Wickham Steed,
On May 1, 1922 The New York Times reported that Gompers, reacting to
negotiations at the international economic conference at Genoa, declared that a
group of “predatory international financiers” were working for the recognition
of the Bolshevik regime for the opening up of resources for exploitation.
Despite the rhetoric by New York and London bankers during the war that a
Russian revolution would serve the Allied cause, Gompers opined that this was
an “Anglo-American-German banking group,” and that they were “international
bankers” who did not adhere to any national allegiance. He also noted that
prominent Americans who had a history of anti-labor attitudes were advocating
recognition of the Bolshevik regime.[6]
What Gompers claimed, was similarly expressed by Henry Wickham Steed of The
London Times, based on his observations. In a first-hand account of the
Paris Peace Conference of 1919, Steed stated that proceedings were interrupted
by the return from Moscow of William C. Bullitt and Lincoln Steffens, “who had
been sent to Russia towards the middle of February by Colonel House and Mr.
Lansing, for the purpose of studying conditions, political and economic,
therein for the benefit of the American Commissioners plenipotentiary to
negotiate peace.”[7] Steed also refers to British Prime Minister Lloyd George
as being likely to have known of the Mission and its purpose. Steed stated that
international finance was behind the move for recognition of the Bolshevik
regime and other moves in favor of the Bolsheviks, and specifically identified
Jacob Schiff of Kuhn, Loeb & Co., New York, as one of the principal bankers
“eager to secure recognition”:
Potent international financial interests were at work in favor of the
immediate recognition of the Bolshevists. Those influences had been largely
responsible for the Anglo-American proposal in January to call Bolshevist
representatives to Paris at the beginning of the Peace Conference—a proposal
which had failed after having been transformed into a suggestion for a
Conference with the Bolshevists at Prinkipo. . . . The well-known American
Jewish banker, Mr. Jacob Schiff, was known to be anxious to secure recognition
for the Bolshevists . . .[8]
In return for diplomatic recognition, Tchitcherin, the Bolshevist
Commissary for Foreign Affairs, was offering “extensive commercial and economic
concessions.”Wickham Steed with the support of The Times’ proprietor, Lord
Northcliffe, exposed the machinations of international finance to obtain the
recognition of the Bolshevik regime, which still had a very uncertain future.
Steed related that he was called upon by US President Wilson’s primary
adviser, Edward Mandel House, who was concerned at Steed’s exposé of the
relationship between Bolshevists and international financers:
That day Colonel House asked me to call upon him. I found him worried both by
my criticism of any recognition of the Bolshevists and by the certainty, which
he had not previously realized, that if the President were to recognize the
Bolshevists in return for commercial concessions his whole “idealism” would be
hopelessly compromised as commercialism in disguise. I pointed out to him that
not only would Wilson be utterly discredited but that the League of Nations
would go by the board, because all the small peoples and many of the big
peoples of Europe would be unable to resist the Bolshevism which Wilson would
have accredited.[9]
Steed stated to House that it was Jacob Schiff, Warburg and other bankers
who were behind the diplomatic moves in favor of the Bolsheviks:
I insisted that, unknown to him, the prime movers were Jacob Schiff,
Warburg, and other international financiers, who wished above all to bolster up
the Jewish Bolshevists in order to secure a field for German and Jewish
exploitation of Russia.[10]
Steed here indicates an uncharacteristic naïveté in thinking that House would
not have known of the plans of Schiff, Warburg, et al. House was
throughout his career close to these bankers and was involved with them in
setting up a war-time think tank called The Inquiry, and following the war the
creation of the Council on Foreign Relations, in order to shape an
internationalist post-war foreign policy. It was Schiff and Paul Warburg and
other Wall Street bankers who called on House in 1913 to get House’s support
for the creation of the Federal Reserve Bank.[11]House in Machiavellian manner asked Steed to compromise; to support
humanitarian aid supposedly for the benefit of all Russians. Steed agreed to
consider this, but soon after talking with House found out that British Prime
Minister Lloyd George and Wilson were to proceed with recognition the following
day. Steed therefore wrote the leading article for the Paris Daily Mail
of March 28th, exposing the maneuvers and asking how a pro-Bolshevik attitude
was consistent with Pres. Wilson’s declared moral principles for the post-war
world?
. . . Who are the tempters that would dare whisper into the ears of the
Allied and Associated Governments? They are not far removed from the men who
preached peace with profitable dishonour to the British people in July, 1914.
They are akin to, if not identical with, the men who sent Trotsky and some
scores of associate desperadoes to ruin the Russian Revolution as a democratic,
anti-German force in the spring of 1917.[12]
Here Steed does not seem to have been aware that some of the same bankers
who were supporting the Bolsheviks had also supported the March Revolution.
Charles Crane,[13] who had recently talked with President Wilson, told
Steed that Wilson was about to recognize the Bolsheviks, which would result in
a negative public opinion in the USA and destroy Wilson’s post-War
internationalist aims. Significantly Crane also identified the pro-Bolshevik
faction as being that of Big Business, stating to Steed: “Our people at home
will certainly not stand for the recognition of the Bolshevists at the bidding
of Wall Street.” Steed was again seen by House, who stated that Steed’s article
in the Paris Daily Mail, “had got under the President’s hide.” House
asked that Steed postpone further exposés in the press, and again raised the
prospect of recognition based on humanitarian aid. Lloyd George was also
greatly perturbed by Steed’s articles in the Daily Mail and complained
that he could not undertake a “sensible” policy towards the Bolsheviks while
the press had an anti-Bolshevik attitude.[14]
Thompson and the American Red Cross Mission
As mentioned, House attempted to persuade Steed on
the idea of relations with Bolshevik Russia ostensibly for the purpose of
humanitarian aid for the Russian people. This had already been undertaken just
after the Bolshevik Revolution, when the regime was far from certain, under the guise of the
American Red Cross Mission. Col. William Boyce Thompson, a director of the NY
Federal Reserve Bank, organized and largely funded the Mission, with other
funding coming from International Harvester, which gave $200,000. The so-called
Red Cross Mission was largely comprised of business personnel, and was
according to Thompson’s assistant, Cornelius Kelleher, “nothing but a mask” for
business interests.[15] Of the 24 members, five were doctors and two were
medical researchers. The rest were lawyers and businessmen associated with Wall
Street. Dr. Billings nominally headed the Mission.[16] Prof. Antony Sutton of
the Hoover Institute stated that the Mission provided assistance for
revolutionaries:
We know from the files of the U.S. embassy in Petrograd that the U.S. Red
Cross gave 4,000 rubles to Prince Lvoff, president of the Council of Ministers,
for “relief of revolutionists” and 10,000 rubles in two payments to Kerensky
for “relief of political refugees.”[17]
The original intention of the Mission, hastily organized by Thompson in
light of revolutionary events, was ‘”nothing less than to shore up the
Provisional regime,” according to the historian William Harlane Hale, formerly
of the United States Foreign Service.[18] The support for the social revolutionaries
indicates that the same bankers who backed the Kerensky regime and the March
Revolution also supported the Bolsheviks, and it seems reasonable to opine that
these financiers considered Kerensky a mere prelude for the Bolshevik coup, as
the following indicates.
Thompson set himself up in royal manner in Petrograd reporting directly to
Pres. Wilson and bypassing US Ambassador Francis. Thompson provided funds from
his own money, first to the Social Revolutionaries, to whom he gave one million
rubles,[19] and shortly after $1,000,000 to the Bolsheviks to spread their
propaganda to Germany and Austria.[20] Thompson met Thomas Lamont
of J. P. Morgan Co. in London to persuade the British War Cabinet to drop its
anti-Bolshevik policy. On his return to the USA Thompson undertook a tour
advocating US recognition of the Bolsheviks.[21] Thompson’s deputy Raymond
Robbins had been pressing for recognition of the Bolsheviks, and Thompson
agreed that the Kerensky regime was doomed and consequently “sped to Washington
to try and swing the Administration onto a new policy track,” meeting
resistance from Wilson, who was being pressure by Ambassador Francis.[22]
Such was Thompson’s enthusiasm for Bolshevism that he was nicknamed “the
Bolshevik of Wall Street” by his fellow plutocrats. Thompson gave a lengthy
interview with The New York Times just after his four month tour with
the American Red Cross Mission, lauding the Bolsheviks and assuring the
American public that the Bolsheviks were not about to make a separate peace
with Germany.[23] The article is an interesting indication of how Wall Street
viewed their supposedly “deadly enemies,” the Bolsheviks, at a time when their
position was very precarious. Thompson stated that while the “reactionaries,”
if they assumed power, might seek peace with Germany, the Bolsheviki would not.
“His opinion is that Russia needs America, that America must stand by Russia,”
stated the Times. Thompson is quoted: “The Bolsheviki peace aims are the
same as those of the Untied States.” Thompson alluded to Wilson’s speech to the
United States Congress on Russia as “a wonderful meeting of the situation,” but
that the American public “know very little about the Bolsheviki.” The Times
stated:
Colonel Thompson is a banker and a capitalist, and he has large
manufacturing interests. He is not a sentimentalist nor a “radical.” But he has
come back from his official visit to Russia in absolute sympathy with the
Russian democracy as represented by the Bolsheviki at present.
Hence at this time Thompson was trying to sell the Bolsheviks as
“democrats,” implying that they were part of the same movement as the Kerensky
regime that they had overthrown. While Thompson did not consider Bolshevism the
final form of government, he did see it as the most promising step towards a
“representative government” and that it was the “duty” of the USA to
“sympathize” with and “aid” Russia “through her days of crisis.” He stated that
in reply to surprise at his pro-Bolshevik sentiments he did not mind being
called “red” if that meant sympathy for 170,000,000 people “struggling for
liberty and fair living.” Thompson also saw that while the Bolsheviki had
entered a “truce” with Germany, they were also spreading Bolshevik doctrines
among the German people, which Thompson called “their ideals of freedom” and
their “propaganda of democracy.” Thompson lauded the Bolshevik Government as
being the equivalent to America’s democracy, stating:
Thompson saw the prospects of the Bolshevik Government being transformed as
it incorporated a more Centrist position and included employers. If Bolshevism
did not proceed thus, then “God help the world,” warned Thompson. Given that
this was a time when Lenin and Trotsky held sway over the regime, subsequently
to become the most enthusiastic advocates of opening Russia up to foreign
capital (New Economic Policy) prospects seemed good for a joint
Capitalist-Bolshevik venture with no indication that an upstart named Stalin
would throw a spanner in the works.
The Times article ends: “At home in New York, the Colonel has
received the good-natured title of ‘the Bolshevik of Wall Street.’”[24] It was
against this background that it can now be understood why labor leader Samuel
Gompers denounced Bolshevism as a tool of “predatory international finance,”
while arch-capitalist Thompson lauded it as “a government of working men.”
The Council on Foreign Relations Report
The Council on Foreign Relations (CFR) had been established in 1921 by
President Wilson’s chief adviser Edward Mandel House out of a previous think tank
called The Inquiry, formed in 1917–1918 to advise President Wilson on the Paris
Peace Conference of 1919. It was this conference about which Steed had detailed
his observations when he stated that there were financial interests trying to
secure the recognition of the Bolsheviks.[25]
Peter Grose in his semi-official history of the CFR writes of it as a think
tank combining academe and big business that had emerged from The Inquiry
group.[26] Therefore the CFR report on Soviet Russia at this early period is
instructive as to the relationship that influential sections of the US
Establishment wished to pursue in regard to the Bolshevik regime. Grosse writes
of this period:
However, financial interests had already moved into Soviet Russia from the
beginning of the Bolshevik regime.
The Vanderlip Concession
H. G. Wells, historian, novelist, and Fabian-socialist, observed first-hand
the relationship between Communism and big business when he had visited
Bolshevik Russia. Travelling to Russia in 1920 where he interviewed Lenin and
other Bolshevik leaders, Wells hoped that the Western Powers and in particular
the USA would come to the Soviets’ aid. Wells also met there “Mr. Vanderlip”
who was negotiating business contracts with the Soviets. Wells commented of the
situation he would like to see developing, and as a self-described
“collectivist” made a telling observation on the relationship between Communism
and “Big Business”:
The only Power capable of playing this role of
eleventh-hour helper to Russia single-handed is the United States of America.
That is why I find the adventure of the enterprising and imaginative Mr.
Vanderlip very significant. I doubt the conclusiveness of his negotiations;
they are probably only the opening phase of a discussion of the Russian problem
upon a new basis
that may lead it at last to a comprehensive world treatment of this situation.
Other Powers than the United States will, in the present phase of
world-exhaustion, need to combine before they can be of any effective use to
Russia. Big business is by no means antipathetic to Communism. The larger big
business grows the more it approximates to Collectivism. It is the upper road
of the few instead of the lower road of the masses to Collectivism.[28]
In
addressing concerns that were being expressed among Bolshevik Party “activists”
at a meeting of the Moscow Organization of the party, Lenin sought to reassure
them that the Government was not selling out to foreign capitalism, but that,
in view of what Lenin believed to be an inevitable war between the USA and
Japan, a US interest in Kamchatka would be favorable to Soviet Russia as a
defensive position against Japan. Such strategic considerations on the part of
the US, it might be added, were also more relevant to US and other forms of
so-called “intervention” during the Russian Civil War between the Red and the
White Armies, than any desire to help the Whites overturn the Bolsheviks, let
alone restore Czarism. Lenin said of Vanderlip to the Bolshevik cadres:
We must take
advantage of the situation that has arisen. That is the whole purpose of the
Kamchatka concessions. We have had a visit from Vanderlip, a distant relative
of the well-known multimillionaire, if he is to he believed; but since our
intelligence service, although splendidly organized, unfortunately does not yet
extend to the United States of America, we have not yet established the exact
kinship of these Vanderlips. Some even say there is no kinship at all. I do not
presume to judge: my knowledge is confined to having read a book by Vanderlip,
not the one that was in our country and is said to be such a very important
person that he has been received with all the honors by kings and
ministers—from which one must infer that his pocket is very well lined indeed.
He spoke to them in the way people discuss matters at meetings such as ours,
for instance, and told then in the calmest tones how Europe should be restored.
If ministers spoke to him with so much respect, it must mean that Vanderlip is
in touch with the multimillionaires.[29]
Of the
meeting with Vanderlip, Lenin indicated that it was based on a secret diplomacy
that was being denied by the US Administration, while Vandrelip returned to the
USA, like other capitalists such as Thompson, praising the Bolsheviks. Lenin
continued:
This
mysterious Vanderlip was in fact Washington Vanderlip who had, according to
Armand Hammer, come to Russia in 1919, although even Hammer does not seem to
have known much of the matter.[31] Lenin’s rationalizations in trying to
justify concessions to foreign capitalists to the “Moscow activists” in 1920
seem disingenuous and less than forthcoming. Washington Vanderlip was an
engineer whose negotiations with Russia drew considerable attention in the USA.
The New York Times wrote that Vanderlip, speaking from Russia, denied
reports of Lenin’s speech to “Moscow activists” that the concessions would
serve Bolshevik geopolitical interests, with Vanderlip declaring that he had
established a common frontier between the USA and Russia and that trade
relations must be immediately restored.[32] The New York Times reporting
in 1922: “The exploration of Kamchatka for oil as soon as trade relations
between this country and Russia are established was assured today when the
Standard Oil Company of California purchased one-quarter of the stock in the
Vanderlip syndicate.” This gave Standard Oil exclusive leases on any syndicate
lands on which oil was found. The Vanderlip syndicate comprised sixty-four
units. The Standard Oil Company has just purchased sixteen units. However, the
Vanderlip concessions could not come into effect until Soviet Russia was
recognized by the USA.[33]
It is little
wonder then that US capitalists were eager to see the recognition of the Soviet
regime.
Bolshevik
Bankers
In 1922
Soviet Russia’s first international bank was created, Ruskombank, headed by
Olof Aschberg of the Nye Banken, Stockholm, Sweden. The predominant capital
represented in the bank was British. The foreign director of Ruskombank was Max
May, vice president of the Guaranty Trust Company.[35] Similarly to “the
Bolshevik of Wall Street,” William Boyce Thompson, Aschberg was known as the
“Bolshevik banker” for his close involvement with banking interests that had
channeled funds to the Bolsheviks.
Guaranty
Trust Company became intimately involved with Soviet economic transactions. A Scotland
Yard Intelligence Report stated as early as 1919 the connection between
Guaranty Trust and Ludwig C. A. K. Martens, head of the Soviet Bureau in New York
when the bureau was established that year.[36] When representatives of the Lusk
Committee investigating Bolshevik activities in the USA raided the Soviet
Bureau offices on May 7, 1919, files of communications with almost a thousand
firms were found. Basil H. Thompson of Scotland Yard in a special report stated
that despite denials, there was evidence in the seized files that the Soviet
Bureau was being funded by Guaranty Trust Company.[37] The significance of the
Guaranty Trust Company was that it was part of the J. P. Morgan economic
empire, which Dr. Sutton shows in his study to have been a major player in
economic relations with Soviet Russia from its early days. It was also J. P.
Morgan interests that predominated in the formation of a consortium, the
American International Corporation (AIC), which was another source eager to
secure the recognition of the still embryonic Soviet state. Interests
represented in the directorship of the American International Corporation (AIC)
included: National City Bank; General Electric; Du Pont; Kuhn, Loeb and Co.;
Rockefeller; Federal Reserve Bank of New York; Ingersoll-Rand; Hanover National
Bank, etc.[38]
The AIC’s
representative in Russia at the time of the revolutionary tumult was its
executive secretary William Franklin Sands, who was asked by US Secretary of
State Robert Lansing for a report on the situation and what the US response
should be. Sands’ attitude toward the Bolsheviks was, like that of Thompson,
enthusiastic. Sands wrote a memorandum to Lansing in January 1918, at a time
when the Bolshevik hold was still far from sure, that there had already been
too much of a delay by the USA in recognizing the Bolshevik regime such as it
existed. The USA had to make up for “lost time,” and like Thompson, Sands considered
the Bolshevik Revolution to be analogous to the American Revolution.[39] In
July 1918 Sands wrote to US Treasury Secretary McAdoo that a commission should
be established by private interests with government backing, to provide
“economic assistance to Russia.”[40]
Armand
Hammer
One of those
closely associated with Ludwig Martens and the Soviet Bureau was Dr. Julius
Hammer, an emigrant from Russia who was a founder of the Communist Party USA.
There is evidence that Julius Hammer was the host to Leon Trotsky when the
latter with his family arrived in New York in 1917, and that it was Dr.
Hammer’s chauffeured car that provided transport to Natalia and the Trotsky
children. The Trotskys were met on disembarkation at the New York dock by
Arthur Concors, a director of the Hebrew Sheltering and Immigrant Aid Society,
whose advisory board included Jacob Schiff of Kuhn, Loeb and Co.[41] Dr. Hammer
was the “primary owner of Allied Drug and Chemical Co.,” and “one of those not
so rare creatures, a radical Marxist turned wealthy entrepreneur,” who lived an
opulent lifestyle, according to Professor Spence.[42] Another financier linked
to Trotsky was his own uncle, banker Abram Zhivotovskii, who was associated
with numerous financial interests including those of Olof Aschberg.[43]
The intimate association of the Hammer family with
Soviet Russia was to be maintained from start to finish, with an interlude of
withdrawal during the Stalinist period. Julius’ son Armand, chairman of
Occidental Petroleum Corporation, wThe AIC’s
representative in Russia at the time of the revolutionary tumult was its
executive secretary William Franklin Sands, who was asked by US Secretary of
State Robert Lansing for a report on the situation and what the US response
should be. Sands’ attitude toward the Bolsheviks was, like that of Thompson,
enthusiastic. Sands wrote a memorandum to Lansing in January 1918, at a time
when the Bolshevik hold was still far from sure, that there had already been
too much of a delay by the USA in recognizing the Bolshevik regime such as it
existed. The USA had to make up for “lost time,” and like Thompson, Sands considered
the Bolshevik Revolution to be analogous to the American Revolution.[39] In
July 1918 Sands wrote to US Treasury Secretary McAdoo that a commission should
be established by private interests with government backing, to provide
“economic assistance to Russia.”[40]
Armand
Hammer
One of those
closely associated with Ludwig Martens and the Soviet Bureau was Dr. Julius
Hammer, an emigrant from Russia who was a founder of the Communist Party USA.
There is evidence that Julius Hammer was the host to Leon Trotsky when the
latter with his family arrived in New York in 1917, and that it was Dr.
Hammer’s chauffeured car that provided transport to Natalia and the Trotsky
children. The Trotskys were met on disembarkation at the New York dock by
Arthur Concors, a director of the Hebrew Sheltering and Immigrant Aid Society,
whose advisory board included Jacob Schiff of Kuhn, Loeb and Co.[41] Dr. Hammer
was the “primary owner of Allied Drug and Chemical Co.,” and “one of those not
so rare creatures, a radical Marxist turned wealthy entrepreneur,” who lived an
opulent lifestyle, according to Professor Spence.[42] Another financier linked
to Trotsky was his own uncle, banker Abram Zhivotovskii, who was associated
with numerous financial interests including those of Olof Aschberg.[43]
The intimate
association of the Hammer family with Soviet Russia was to be maintained from
start to finish, with an interlude of withdrawal during the Stalinist period.
Julius’ son Armand, chairman of Occidental Petroleum Corporation, was the first
foreigner to obtain commercial concessions from the Soviet Government. Armand
was in Russia in 1921 to arrange for the reintroduction of capitalism according
to the new economic course set by Lenin, the New Economic Policy. Lenin stated
to Hammer that the economies of Russia and the USA were complementary, and in
exchange for the exploitation of Russia’s raw materials he hoped for America’s
technology.[44] This was precisely the attitude of significant business
interests in the West. Lenin stated to Hammer that it was hoped the New
Economic Policy would accelerate the economic process “by a system of
industrial and commercial concessions to foreigners. It will give great
opportunities to the United States.”[45]
Hammer met
Trotsky, who asked him whether “financial circles” in the USA regard Russia as
a desirable field of investment? Trotsky continued:
Inasmuch as
Russia had its Revolution, capital was really safer there than anywhere else
because, “whatever should happen abroad, the Soviet would adhere to any
agreements it might make. Suppose one of your Americans invest money in Russia.
When the Revolution comes to America, his property will of course be
nationalized, but his agreement with us will hold good and he will thus be in a
much more favorable position than the rest of his fellow capitalists.[46]
The manner
by which Russia fundamentally changed direction, resulting eventually in the
Cold War when Stalin refused to continue the wartime alliance for the purposes
of establishing a World State via the United Nations Organization, traces its
origins back to the divergence of opinion, among many other issues, between
Trotsky and Stalin in regard to the role of foreign investment in the Soviet
Union.[47] The CFR report had been prescient in warning big business to get
into Russia immediately lest the situation changed radically.
Regimented
Labor
But for the
moment, with Trotsky entrenched as the warlord of Bolshevism, and Lenin
favorable towards international capital investment, events in Russia seemed to be
promising. A further major factor in the enthusiasm certain capitalist
interests had for the Bolsheviks was the regimentation of labor under the
so-called “dictatorship of the proletariat.” The workers’ state provided
foreign capitalists with a controlled workforce. Trotsky had stated:
The militarization of labor is the indispensable
basic method for the organization of our labor forces. . . . Is it true that significant
business interests in the West. Lenin stated to Hammer that it was hoped the
New Economic Policy would accelerate the economic process “by a system of
industrial and commercial concessions to foreigners. It will give great
opportunities to the United States.”[45]
Hammer met
Trotsky, who asked him whether “financial circles” in the USA regard Russia as
a desirable field of investment? Trotsky continued:
Inasmuch as
Russia had its Revolution, capital was really safer there than anywhere else
because, “whatever should happen abroad, the Soviet would adhere to any
agreements it might make. Suppose one of your Americans invest money in Russia.
When the Revolution comes to America, his property will of course be
nationalized, but his agreement with us will hold good and he will thus be in a
much more favorable position than the rest of his fellow capitalists.[46]
The manner
by which Russia fundamentally changed direction, resulting eventually in the
Cold War when Stalin refused to continue the wartime alliance for the purposes
of establishing a World State via the United Nations Organization, traces its
origins back to the divergence of opinion, among many other issues, between
Trotsky and Stalin in regard to the role of foreign investment in the Soviet
Union.[47] The CFR report had been prescient in warning big business to get
into Russia immediately lest the situation changed radically.
Regimented
Labor
But for the
moment, with Trotsky entrenched as the warlord of Bolshevism, and Lenin
favorable towards international capital investment, events in Russia seemed to be
promising. A further major factor in the enthusiasm certain capitalist
interests had for the Bolsheviks was the regimentation of labor under the
so-called “dictatorship of the proletariat.” The workers’ state provided
foreign capitalists with a controlled workforce. Trotsky had stated:
The
militarization of labor is the indispensable basic method for the organization
of our labor forces. . . . Is it true that compulsory labor is always
unproductive? . . . This is the most wretched and miserable liberal prejudice:
chattel slavery too was productive. . . . Compulsory slave labor was in its
time a progressive phenomenon. Labor obligatory for the whole country,
compulsory for every worker, is the basis of socialism. . . . Wages must not be
viewed from the angle of securing the personal existence of the individual
worker [but should] measure the conscientiousness, and efficiency of the work
of every laborer.[48]
Hammer
related of his experiences in the young Soviet state that although lengthy
negotiations had to be undertaken with each of the trades unions involved in an
enterprise, “the great power and influence of the trade unions was not without
its advantages to the employer of labor in Russia. Once the employer had signed
a collective agreement with the union branch there was little risk of strikes
or similar trouble.”
Breaches of
the codes as negotiated could result in dismissal, with recourse by the sacked
worker to a labor court which, in Hammer’s experience, did not generally find
in the worker’s favor, which would mean that there would be little chance of
the sacked worker getting another job.[49]
However,
Trotsky’s insane run in the Soviet Union was short-lived. As for Hammer,
despite his greatly expanding and diverse businesses in the Soviet Union, after
Stalin assumed power Hammer packed up and left, not returning until Stalin’s
demise. Hammer opined decades later:
I never met
Stalin—I never had any desire to do so—and I never had any dealings with him.
However it was perfectly clear to me in 1930 that Stalin was not a man with
whom you could do business. Stalin believed that the state was capable of
running everything without the support of foreign concessionaires and private
enterprise. That is the main reason I left Moscow. I could see that I would soon
be unable to do business there and, since business was my sole reason to be
there, my time was up.[50]
Foreign capital did nonetheless continue to do
business with the USSR[51] as best as it was able, but the promising start that
capitalists saw in the March and November revolutions for a new Russia that
would replace the antiquated Czarist system too was
productive. . . . Compulsory slave labor was in its time a progressive
phenomenon. Labor obligatory for the whole country, compulsory for every
worker, is the basis of socialism. . . . Wages must not be viewed from the angle
of securing the personal existence of the individual worker [but should]
measure the conscientiousness, and efficiency of the work of every laborer.[48]
Hammer
related of his experiences in the young Soviet state that although lengthy
negotiations had to be undertaken with each of the trades unions involved in an
enterprise, “the great power and influence of the trade unions was not without
its advantages to the employer of labor in Russia. Once the employer had signed
a collective agreement with the union branch there was little risk of strikes
or similar trouble.”
Breaches of
the codes as negotiated could result in dismissal, with recourse by the sacked
worker to a labor court which, in Hammer’s experience, did not generally find
in the worker’s favor, which would mean that there would be little chance of
the sacked worker getting another job.[49]
However,
Trotsky’s insane run in the Soviet Union was short-lived. As for Hammer,
despite his greatly expanding and diverse businesses in the Soviet Union, after
Stalin assumed power Hammer packed up and left, not returning until Stalin’s
demise. Hammer opined decades later:
I never met
Stalin—I never had any desire to do so—and I never had any dealings with him.
However it was perfectly clear to me in 1930 that Stalin was not a man with
whom you could do business. Stalin believed that the state was capable of
running everything without the support of foreign concessionaires and private
enterprise. That is the main reason I left Moscow. I could see that I would soon
be unable to do business there and, since business was my sole reason to be
there, my time was up.[50]
Foreign capital did nonetheless continue to do
business with the USSR[51] as best as it was able, but the promising start that
capitalists saw in the March and November revolutions for a new Russia that
would replace the antiquated Czarist system with a modern economy from which
they could reap the rewards was, as the 1923 CFR report warned, short-lived Gorbachev
and Yeltsin provided a brief interregnum of hope for foreign capital, to be
disappointed again with the rise of Putin and a revival of nationalism and
opposition to the oligarchs. The policy of continuing economic relations with
the USSR even during the era of the Cold War was promoted as a strategy in the
immediate aftermath of World War II when a CFR report by George S Franklin
recommended attempting to work with the USSR as much as possible, “unless and
until it becomes entirely evident that the U.S.S.R. is not interested in
achieving cooperation . . .”
The United
States must be powerful not only politically and economically, but also
militarily. We cannot afford to dissipate our military strength unless Russia
is willing concurrently to decrease hers. On this we lay great emphasis.
We must take
every opportunity to work with the Soviets now, when their power is still far
inferior to ours, and hope that we can establish our cooperation on a firmer
basis for the not so distant future when they will have completed their
reconstruction and greatly increased their strength. . . . The policy we
advocate is one of firmness coupled with moderation and patience.[52]
Since Putin,
the CFR again sees Russia as having taken a “wrong direction.” The current
recommendation is for “selective cooperation” rather than “partnership, which
is not now feasible.”[53]
The
Revolutionary Nature of Capital
Should the
fact that international capital viewed the March and even the November
Revolutions with optimism be seen as an anomaly of history? Oswald Spengler was
one of the first historians to expose the connections between capital and
revolution. In The Decline of the West he called socialism
“capitalistic” because it does not aim to replace money-based values,
“but to possess them.” H. G. Wells, it will be recalled, said something
similar. Spengler stated of socialism that it is “nothing but a
trusty henchman of Big Capital, which knows perfectly well how to make use of
it.” He elaborated in a footnote, seeing the connections going back to
antiquity:
It was the Equites,
the big-money party, which made Tiberius Gracchu’s popular movement possible at
all; and as soon as that part of the reforms that was advantageous to
themselves had been successfully legalized, they withdrew and the movement
collapsed.[55]
From the
Gracchuan Age to the Cromwellian and the French Revolutions, to Soros’ “color
revolutions” of today, the Russian Revolutions were neither the first nor the
last of political upheavals to serve the interests of Money Power in the
name of “the people.”
Notes
[1] K. R.
Bolton, “March 1917: Wall Street & the March 1917 Russian Revolution,” Ab
Aeterno, No. 2 (March 2010).
[2] Michael
Pearson, The Sealed Train: Journey to Revolution: Lenin–1917 (London:
Macmillan, 1975).
[3] Paul
Warburg, prior to immigrating to the USA, had been decorated by the Kaiser in
1912.
[4] Col.
William Wiseman, head of the British Secret Service, was the British equivalent
to America’s key presidential adviser, Edward House, with whom he was in
constant communication. Wiseman became a partner in Kuhn, Loeb & Co. From
London on May 1, 1918 Wiseman cabled House that the Allies should intervene at
the invitation of the Bolsheviks and help organize the Bolshevik army then
fighting the White Armies in a bloody Civil War at a time when the Bolshevik
hold on Russia was doubtful (Edward M. House, ed. Charles Seymour, The
Intimate Papers of Col. House [New York: Houghton, Mifflin Co., 1926], Vol.
III, p. 421).
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