Bogumil,
I uncovered some interesting tidbits of information that I should share with you because it is related to your area of interest than my own. Since I am unsure if you were already aware of the following information in your research, I felt compelled to bring it to your attention in the latest ARPLAN post. To begin, I had begun mapping out the known extent of foreign relations between the German Reich and the Soviet Union prior to the Molotov-Ribbentrop Pact and Operation Barbarossa. All the information on ARPLAN so far has filled in some of the gaps on the motivations behind the German Reich’s foreign policies toward the Soviet Union. The rest was left in the Soviet archives and has only been brought to light in recent decades.
Thanks to the course set by Walther Rathenau, the German Reich was relying on the Soviet Union for various strategic materials that cannot be found within the German-speaking world. Yes, the German Reich prior to the Hitlerists was technically a pariah state under the terms of the Versailles Treaty. In addition to the military cooperation between the Soviet Red Army and the German Reichswehr, German efforts invest in the Soviet economy both economically and financially were also being promoted at a time before the Eastern Bloc and before the Soviet Union became a juggernaut that it would later become.
German financial institutions, due to the war reparations imposed by the Versailles Treaty and later economic sanctions, struggled to acquire foreign currencies to obtain various natural resources which cannot otherwise be found anywhere within the broader German-speaking world. Without foreign currencies, the Manufacturing Sector will not be able to receive the raw materials they need to create various finished goods for the Services Sector. Meanwhile, the Soviet economy also needed foreign investments in order for the Soviet Union to become self-sufficient. Since the infrastructure and productive forces were not there yet, the State Capitalism of NEP was promoted as a gradual step toward Pure Socialism.
The needs of German finance and Soviet industry led to a series of trade agreements that lasted from the Rapallo Treaty to the opening phases of Operation Barbarossa. German banks and investors provided the Soviet economy with Reichsmarks to spend on their industrialization. The Soviets paid back their loans based on the Values of various raw materials sent to the German-speaking world, the Prices of which were denominated in Soviet Rubles. While gold was among the raw materials exported, it was not the only one.
The 1st Five Year Plan could not have been achieved without the Soviet economy receiving access to machinery and industrial tools. German heavy industries were arguably the biggest benefactor compared to the rest of the German economy. By the time Karl Otto Paetel finished writing “The National Bolshevik Manifesto,” the Soviet Union had accumulated a Sovereign Schuld of $155,000,000 in 1933 US Dollars. As of November 2022, that is the equivalent of around $3,553,220,000 USD. In spite of their best efforts, the 1st Five-Year Plan almost forced the Soviet Union to default on their Sovereign Schuld and get tossed into the Great Depression like the Western countries.
But the NSDAP, for whatever reason, decided to intervene and helped the CPSU avoid defaulting on the Sovereign Schuld. It was a decision on the NSDAP’s part and the only person that I know of who vocally criticized this decision was Hermann Göring. Göring expressed skepticism on the CPSU’s determination to pay all Sovereign Schuld owed to the German Reich for the same reasons that I had stated earlier. The CPSU and the NSDAP had no access to foreign currencies.
Göring’s skepticism later subsided when it became apparent that the CPSU would pay its Sovereign Schuld in raw materials such as crude oil, timber, manganese, gold and silver. The gold and silver exported to the German Reich were harvested ores that had yet to be converted into actual bullion and could instead be used for various industrial applications such as electrical appliances and demolitions for construction work. The NSDAP still drained the German Reich’s gold reserves in order to promote the economic recovery of the German-speaking world.
It is no secret that the Hitlerists were opposed to the Soviet Union prior to 1939. Even so, there were attempts by the CPSU to convince elements of the NSDAP to change the Anti-Soviet orientation of the German government. The economic factions within both parties believed that their countries would benefit from forging an “economic alliance,” a plan that they discussed off-the-record between 1935 and 1938. The argument was that German financing of the Soviet economy will allow the latter to support the German economy. The German Reich, upon reuniting the German-speaking world, would help the Soviet Union create an economic and military alliance to promote the “‘collective security’” of Eastern Europe and possibly even the Eurasian landmass. The result was something far greater than that of the Molotov-Ribbentrop Pact.
“‘Collective security’” is the specific term that these factions within the NSDAP and CPSU chose to describe those arrangements. Their ideal goal would have been something akin to establishing the CMEA (Council for Mutual Economic Assistance) and the Warsaw Pact during the 1930s. But when it became apparent that the Hitlerists were unwilling to support such an endeavor, not to mention Stalin’s paranoia that led to the purges of his Foreign Ministry, these factions were forced to settle for an attempt to promote peaceful coexistence.
Have you ever heard of the “Kandelaki Affair” that happened in the German-speaking world around 1935-1937 by any chance, Bogumil? I would like to share more information about the topic once I have delved into that and some other related topics further.
Signed,
-DAH
Categories: Politics
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