1 number Gavrilova

HISTORY

УДК 94(47).084

THE OCTOBER REVOLUTION OF 1917

IN INTERNATIONAL TRADE AND INDUSTRIAL RELATIONS^[1]

Gavrilova Liya Gabriela

Emerson College, Boston, Massachusetts (1996)

Journalism (Master’s)

Catholic University, Washington, DC+

University of Warsaw, Poland (1983 – 1984)

Political Science / Economics (Bachelor’s Degree)

ggavrilov100@yahoo.com

http://orcid.org/0009-0008-9246-9646

© Translated from English. V. V. Vorontsov. Oct. 2024

Abstract. The author, American historian Gabriela Gavrilova, examines the economic policies of the Soviet government, which used the tactics of “War Communism” (1918-1921) to eliminate domestic Russian entrepreneurs and subordinate the Russian economy to the trusts and syndicates under its control, and then proclaimed the “New Economic Policy” (NEP) of 1921-1929 to transfer key industries—the “commanding heights” of the Soviet economy—to the titans of Western capitalism in the the form of concessions – private business contracts that are outside the framework of official interstate trade relations. Soviet electrical, agricultural, oil, gold, coal, metallurgical, and numerous other trusts were created and headed by Western trade agents. These trusts then began to award large concession contracts to Western corporations, which not only made a profit but also paid royalties to the Soviet government. Avoiding ideological clichés as distractions from reality, and going beyond the study of official interstate trade relations, the author devotes his work to large commercial contracts concluded for decades directly between private Western corporations and the Soviet government, which, as a rule, were not included in official statistics.

Key words: concessions, trusts, commercial contracts, Soviet government, foreign capital, transnational corporations.

A study of the mass of unpublished commercial correspondence between U.S. corporations and Soviet Russia^[2] leads to the conclusion that the real story is fundamentally at odds with the diplomatic and political records. Instead of the mortal enemies that the U.S. and Russia have consistently declared themselves, since the usurpation of power by the Bolsheviks in 1917, we see vigorous commercial activity showing that many of the largest U.S. multinational companies have quickly become best friends Soviet Russia; although this friendship was not on an equal footing. By focusing on the vast construction, industrial, chemical, agricultural, and resource concessions obtained by Western, particularly American, companies under the Soviet regime’s foreign trade monopoly—instead of the diplomatic notes constantly discussed in the press—this study fundamentally changes our understanding of the nature of U.S. relations with Russia and modern history.

Discarding ideology as hypocritical and outright false, this study does not consider American liberal democracy, “free market” capitalism, as opposed to Marxism-Leninism, as unworthy of attention. Likewise, Soviet Marxism-Leninism, which poured anti-capitalist bile and claimed to defend the international working class by allowing the West’s biggest capitalists and their companies to establish and run Soviet industrial trusts – the “commanding heights” of the Soviet economy – is seen solely as one of the greatest propaganda campaigns in history (in which the West was complicit). Focusing on ideological statements or maintaining the belief that political decisions are based on moral conviction simply obfuscates the real events and the true political goals behind them.

The volume, intensity, and sustainability of Western commercial involvement in the Soviet command economy speak for themselves and reveal the true purpose behind the public criticism of the Soviets propagated by our media for more than a century: money.

At the turn of the 20th century, Russia was the largest single market in the world, and the Bolsheviks, once they seized the wealth that belonged to the Russian monarchy, became the richest revolutionary regime in history. This fact alone should stimulate much more journalistic and historical research than has been produced in the last century.

With a fortune amassed over three centuries of ancestral rule across a vast swath of Eurasia, Tsar Nicholas II (1868-1918) had an estimated $300 billion at the time of his overthrow in February 1917. The government of the Russian Empire was the richest administration in terms of material resources in the world, owning thousands of square miles of land rich in forests, minerals, and farmland.

The basis of the Tsar’s wealth was more than 250,966 square miles (65 million hectares) of land owned by the Imperial House, including regions rich in gold, silver, iron ore, and lithium. Already producing two million tons of coal a year, the Romanov-owned mines of the Kuznetsk Basin near the southwestern Altai region of Siberia stretched over ten thousand square miles and contained 450 billion tons of recoverable coal. controlling stakes in these mines, but the Romanovs stood in their way^[3].

The Romanov family also owned land in Transbaikalia. This region remains rich in forests, deposits of uranium, fluorite, gold, copper, molybdenum, titanium, silver, lead, zirconium, tungsten, tin ore, lithium, zinc, iron ore, coal and natural gas. Before the October Revolution, only the gold, silver, copper, coal and lead mines of Altai and Transbaikalia provided an annual income of 6-7 million rubles^[4].

Russia’s main and most profitable export, grain, competed with American wheat on the world market. Grown and harvested on land under the monarchical system, the profits of this huge business were inviolable for foreign firms. From 1861 until the outbreak of World War I, Russia supplied almost a third of the world’s wheat^[5]. In 1913, Russia produced 1,027.7 million bushels of wheat for the world market (compared to U.S. production of 763.4 in the same year), ^[6]at a price of 0.78 cents per bushel, the value of this industry was $801.6 million^[7] that year alone. By 1917, the price of a bushel had risen to $2.12^[8] due to war inflation.

Much of the war industry was also under state control, accounting for more than 4 percent of industrial production in 1913, far more than 1 percent in France and 1-2 percent in Britain^[9].

The Russian monarchy also owned 85 percent of Russia’s vast forests.

Russian oil exports competed with^[10] Rockefeller’s Standard Oil, which was losing rich markets in Europe and Asia due to the superior quality of Russian oil and lower transportation costs.

These riches alone were a good reason for the overthrow of the monarchy by the Bolsheviks, who, having seized control of the Russian state in October 1917, instantly became the owners of the world’s largest resources.

Moreover, Russia’s emerging economy was on the cusp of an economic boom that began with the completion of the Trans-Siberian Railway in 1916. The two-continental country covered 1/5 of the Earth’s land and occupied a uniquely advantageous geotrade position between the Baltic Sea, Scandinavia, Europe, the Mediterranean, the Black and Caspian Seas, Persia, India, Northern China, the Pacific Ocean, Japan and the overwhelming part of the Arctic Ocean. With rail transport linking the Baltic Sea to the Sea of Japan, all of Russia and its rich resources became open to the greatest trade traffic the world had ever known, and Russia was poised to become a commercial colossus.

“By 1948,” the French economist Edmond Théry reported in 1913, “the population of Russia will be 343.9 million”—three times that of Germany, six times that of Great Britain, and eight times that of France. “If things continue between 1912 and 1950 as they did between 1900 and 1912,” he reasoned, “Russia will dominate Europe by the middle of this century, politically, economically, and ^{[11] [12]}financially.”

But all this came to an abrupt end when, in 1918, the Soviet government established the world’s first complete state monopoly of foreign trade.

The Soviet monopoly on trade, the result of the forced nationalization of the entire economy – equivalent to a hostile takeover of^[13] all private enterprises in the country – was proclaimed on April 22, 1918. As part of the policy of “War Communism,” which included a ban on private enterprise and military control of the railways^[14], the Soviet monopoly on trade immediately made the Bolshevik regime the largest buyer (and seller) in the world.

Having forcibly seized all the enterprises in Russia, the caustic “anti-capitalist” Bolsheviks immediately reorganized these former private enterprises into the most predatory capitalist institutions that had recently been banned in the United States under antitrust laws—trusts, syndicates, and monopolies. Now that all the enterprises of the Russian Empire had been taken under the control of the government, the Bolshevik regime immediately allowed some of the largest foreign multinational companies to participate in the organization and management of these industrial trusts, consisting of property, equipment, and even employees of their former competitors.

The official reason for the forced nationalization, reorganization, and unprecedented centralization of the economy announced by the Bolsheviks was to prevent the exploitation of Russia by foreign firms. However, it was these largest foreign firms that quickly entered the Soviet economy. Of the 50 largest American corporations in 1917, between 1920 and 1928, at least 27 quietly began to participate in the management of Soviet industrial trusts (Table 1).

Some, such as International Harvester, Westinghouse, General Electric, and Singer Sewing Machine, already had facilities in Tsarist Russia and continued to do business with the Soviets.

Those marked with an asterisk (*) were involved in the Soviet economy between 1917 and 1933 and later.

Table 1^[15]

№	Company	Branch	Current state Company
1	U.S. Steel*	Steel	Exists
2	American Telephone & Telegraph (AT&T)*	Telecommunications	Exists
3	Standard Oil of N.J.*	Oil & Gas Production	Exists
4	Bethlehem Steel*	Steel	Exists, has expanded
5	Armour & Co.*	Food	Exists, has expanded
6	Swift & Co.*	Food	Exists, has expanded
7	International Harvester*	Production of agricultural machinery and trucks	Exists, has expanded
8	E.I. DuPont de Nemours*	Chemical industry	Exists
9	Midvale Steel & Ordnance	Steel	Acquired Bethlehem Steel (1923)
10	U.S. Rubber	Rubber production	Renamed Uniroyal (1964)
11	General Electric*	Diversified Corporation	Exists
12	International Mercantile Marine	Shipping	Renamed U.S. Lines (1943)
13	American Smelting & Refining*	Mining	Exists, has expanded
14	Anaconda Copper Mining*	Mining	Exists, has expanded
15	Standard Oil (N.Y.) (Mobil)*	Oil & Gas Production	Renamed Mobil (1966)
16	Phelps Dodge	Mining	Exists, has expanded
17	Singer Manufacturing*	Textile industry	Exists, has expanded
18	Jones & Laughlin Steel	Steel	Exists, has expanded
19	Westinghouse Electric*	Diversified Energy Corporation	Exists
20	American Tobacco*	Tobacco	Exists, has expanded
21	Ford Motor*	Automotive	Exists
22	Union Carbide*	Chemical industry	Exists
23	Cambria Steel	Steel	Acquired Bethlehem Steel (1923)
24	Pacific Gas & Electric	Sale and delivery of electricity and natural gas to consumers	Exists
25	B.F. Goodrich	Rubber production	Exists, has expanded
26	Central Leather	Leather	Liquidated (1953)
27	Kennecott Copper*	Mining	Exists, has expanded
28	Pullman*	Railway wagons and transport operation	Divided (1943) exists, has expanded
29	Pennsylvania RR	Transcontinental freight and passenger rail transportation	Exists, has expanded
30	Consolidation Coal	Mining	Bankrupt (1932)
31	American Sugar Refining*	Sugar processing	Exists, has expanded
32	Chile Copper	Mining	Acquired by Atlantic Richfield (1929)
33	Cities Service	Oil & Gas Production	Renamed Citgo (1965)
34	General Motors*	Automotive	Exists
35	American Can	Packaging material	Exists, has expanded
36	Sears, Roebuck	Retail	Exists
37	Texas Company (Texaco)	Oil & Gas Production	Renamed to Texaco
38	American Car & Foundry*	Railway Equipment	Renamed ACF Industries (1955)
39	Standard Oil (Calif.)	Oil & Gas Production	Exists
40	Standard Oil (Ind.)	Oil & Gas Production	Exists
41	Magnolia Petroleum (Mobil)	Oil & Gas Production	Acquired by Standard Oil (N.Y.) (1925)
42	American Woolen*	Textile industry	Acquired by Textron (1955)
43	Pittsburgh Coal	Mining	Liquidated (1966)
44	Willys-Overland	Automotive	Reorganized (1936)
45	Corn Products Refining	Food	Merged with Corn Products Co. (1958)
46	Republic Iron & Steel	Steel	Exists, has expanded
47	United Fruit (through RCA)*	Food	Exists, has expanded
48	Liggett & Myers Tobacco*	Tobacco	Exists, has expanded
49	Virgina Carolina Chemical (Mobil)	Chemical industry	Acquired by Mobil (1963)
50	Aluminum Co. of America (ALCOA)*	Metallurgy, aluminum production	Exists

Concessions = the largest and repeated state contracts concluded exclusively with Western firms

In addition to being the world’s largest buyer (and seller) and controlling one of the richest and largest state territories on the planet, the Soviet regime quickly became the largest and most prolific source of government contracts for Western companies.

On December 14, 1917, just six weeks after the October Revolution, at the time of the creation of the Supreme Council of National Economy (VSNKh),^[16] the All-Russian Central Executive Committee drew up plans for the creation of industrial, agricultural, logging and mining concessions^[17], which it intended to offer to Western companies, deliberately excluding local enterprises, which were banned. It was decided that concessions would become a means of representing resources Russia to Western companies^[18]. This move, which was in line with the German September Program^[19], placed the Russian economy at the disposal of foreign multinational corporations.

After the destruction of the free market that existed in the Russian Empire under “War Communism” (1918-1921) was completed, and the former private enterprises were nationalized and transferred to trusts and syndicates, the Soviet regime invited the titans of Western capitalism to participate in the exploitation of the now Soviet-controlled Russian economy through state concessions. These concessions, in turn, were supposed to provide the young regime with income, royalties, and vital covert political support from corporations involved in Soviet Russia’s industrial development, which began as part of Lenin’s electrification campaign and continued for twelve “five-year plans” until 1990.

At that time, the U.S. government stepped aside with a policy of non-recognition of the Soviet regime, which proceeded from the conviction that “the existing regime in Russia is based on a total denial of the principles of honor and good faith, as well as all customs and agreements that underpin the structure of international law — in short, on the denial of all principles on which harmonious and trusting relations can be built.” The U.S. could not find “any common ground, on which they could stand with a power whose conceptions of international relations are as alien to their own as they are utterly contrary to their notions of morality.”^[20] Leaving businessmen. The mission, which arrived in July 1917 with the aim of keeping Russia out of the European war, quickly moved after the October Revolution under the leadership of Raymond Robins to use the Bolshevik agenda for the commercial benefit of the United States^[21]. Unmoved by any moral considerations, the head of the Red Cross, Raymond Robins, remained in Russia until July 1918, meeting daily with both Lenin and Trotsky. testing their loyalty to the United States, as well as their willingness and ability to control vast areas of Russia in order to work with American corporations. The leading firms represented in the Mission continued to do business in Soviet Russia for decades^[22].

The Mission to Russia was organized by J. P. Morgan’s partner (Jr.) Henry P. Davidson, who coordinated its activities from New York, while the Mission was headed from July to November 1917 by William Boyce Thompson, chairman of the Federal Reserve Bank of New York and tycoon of the Anaconda Copper Company, after whom copper magnate Raymond Robins took over. According to Robins’ testimony during the U.S. Senate hearings on Bolshevik propaganda in 1919, the head of the Red Cross worked with Lenin in 1917-1918 to modify various Soviet decrees to, among other things, reduce their negative impact on American business in Russia. For example, the Nationalization Decree was amended to exclude certain U.S. companies with commercial ownership in Russia, such as the International Harvester plant in Lyubertsy^[23].

Russian-American businessman Alexander Gumberg^[24], a representative of the industrial purchasing agents of Perelstrous & Storm^[25] and translator for the Mission, whose brother Zorin had worked with Lenin and Trotsky at Smolny, returned to Soviet Russia in 1923 as head of the All-Russian Textile Syndicate (ARTS). During the 1920s, in partnership with the National City Bank, also part of the Red Cross Mission, Gumberg established branches of the Soviet Textile Trust in New York for the purchases of American cotton. Leon Trotsky worked with Gumberg on the émigré bulletin when they both lived in Manhattan in 1916-1917.

Another member, Boris Reinstein, a pharmacist from Buffalo who had close ties to the American oil magnate Armand Hammer, became Lenin’s personal secretary^[26].

Despite such notable people, events, and circumstances, the American Red Cross Mission to Russia (1917-1918) has been ignored by historians—with the exception of George F. Kennan’s book Russia Emerging from the War: Soviet-American Relations, 1917-1920 (1956). The American Red Cross Mission with the Root Mission before it and the Stevens Railroad Mission after it laid the foundation for U.S.-Soviet commercial and political relations, which changed little over the next seventy years^[27].

Lenin’s “Plan for Russian-American Trade Relations”

Lenin ^[28]presented the plan to Robins in May 1918, and Robins brought it back to the United States when he returned from Soviet Russia, and gave it to President Wilson. While the president is said to have ignored Lenin’s plan, the titans of American business did not. as evidenced by the volume of concession offers under the plan, which were made by American firms.

Lenin’s Plan for Russian-American Trade Relations states:

«… In nationalizing foreign trade, the Government of [Soviet] Russia has the right to buy goods where it deems it necessary and to sell them where it deems it most advantageous to itself. On this basis, it is possible to conclude trade agreements and transactions on a case-by-case basis, regardless of the amount. Not on the basis of any written concessions, but on the basis of a business agreement. … As a security for payment for goods imported into Russia, America could be granted the privilege of participating in certain construction enterprises, such as: the construction of electric power plants on the Volkhov and Svir, the construction of a canal that will connect the Solovetsky Islands^[29] with Petrograd, the development of the waterways of the Donbas and the Volga-Don Canal, the development of coal mines, the exploitation of the seal fishery on the Commander Islands, the timber industry in Southern Kamchatka. the construction of railways from Irkutsk to Bodaibo on the Rion River, Nikolaevsk-on-Amur – Grafskaya, Olga Bay, Verkhneudinsk – Urga, etc. The United States could also participate on a large scale in the development of some known vast agricultural areas, introducing modern methods, receiving in return most of the products…”^[30]

While the U.S. president did not formally respond to Lenin’s plan, American firms did. The Volkhov and Nizhne-Svirskaya power plants were built and equipped by American firms. The former imperial coal mines in Kuzbass, the Tsar’s largest and richest landed estate, became the “American Autonomous Industrial Colony” in 1921 under the administration of American trade union leader Bill Heywood. Rich in gold, silver, coal, iron ore, and lithium, also included a 36.8-square-mile site for agricultural production. By 1928, American agricultural experts were running two of Stalin’s largest collective farms, “Camel” and “Giant,” ^[31]and between 1927 and 1929, during Stalin’s collectivization campaign, U.S. agricultural machinery was supplied to more than $43.5 million^[32]. Moreover, American agricultural experts, including former head of the U.S. Department of Agriculture, Milburn Wilson, served on the board of directors of Soviet Grain trust and advised Stalin during the failed collectivization campaign^[33].

Within a year of its establishment in 1919 as the unofficial embassy and commercial trade organization of the diplomatically unrecognized Soviet Russia, the Russian Soviet Government Bureau — with an office in the heart of Manhattan — received representatives from more than a thousand American firms, including the Morgan Guaranty Trust, who applied to enter the Soviet market. After the dissolution of the Russian Soviet Government Bureau in 1920, the American magnate Armand Hammer took over its work and until 1923 was Lenin’s appointed intermediary of 38 international companies in their relations with the USSR. In 1924, the Soviet-American corporation Amtorg Inc. was founded in Manhattan by merging Armand Hammer’s Allied American Corporation (Alamerico) with Products Exchange Corporation (Prodexco) and Arcos-America Inc. (Rus. Amtorg). Like its sister organization, ARCOS Ltd. in London, Amtorg had exclusive rights to buy American products and sell Russian resources to American firms.

During the sixteen-year diplomatic rift between the United States government and the Soviet Union, American and other Western firms became “an integral part of the planned organization of the [Soviet] government.”^[34]

By 1922, International General Electric, Siemens, Swedish GE (ASEA), German GE (AEG), Radio Corporation of America (RCA), and other Western electrical engineering firms had founded and filled the boards of directors of Soviet electric trusts—trusts made up of former private enterprises owned by domestic and foreign competitors of these multinational corporations.

That year, with Lenin’s proclamation of an electrification campaign, they received contracts from the Soviet government to design, build and equip a network of thirty of the largest regional power plants at that time, including ten large hydroelectric power plants. The most powerful hydroelectric power plant, Dneprostroi, at a cost of more than 400 million dollars, was built under the direction of the American engineer Colonel Hugh L. Cooper, who had previously built the Wilson Dam. The plant also supplied nine huge turbines, but other American companies also participated in the economic boom of the Soviet Five-Year Plan. Cooper and members of his team were even awarded the Order of the Red Star^[35] “for their merits in strengthening the defense capability of the socialist community.”

Lenin’s electrification campaign (1921-1929) was organized with the aim of creating the necessary capacity of affordable electricity in kWh within Russia to provide electricity for future Western industrial enterprises designed, built and equipped within the framework of the First Five-Year Plan (1928-1933).

After seven years of building power plants in strategically important economic regions of the country, the Supreme Council of the National Economy (VSNKh) appointed the Chicago-based architectural firm Freyn Company as a technical consultant in the field of metallurgical industry to the Soviet State Institute for the Design of Metallurgical Plants (Gipromez) on the directive of the General Secretary of the Communist Party Joseph Stalin^[36]. On August 4, 1928, The New York Times reported^[37]: “Mr. Frayn has also succeeded in organizing the creation of a special Russian branch of the Freyn Company, which will operate as an integral part of Gipromez.” In 1930, Frayn began work “on construction contracts worth more than $100 million” (about $1.86 trillion in 2024 dollars).

A year after working with American steel plant designers, Stalin announced the 1st Five-Year Plan, which focused on the construction of steel and tractor plants and related projects. With a capital investment of 64 billion rubles^[38] (32.960 billion in 1928 dollars), ^[39]the First Soviet Five-Year Plan marked the beginning of the largest economic project in history, the construction and equipping of which was to be carried out by almost exclusively Western firms. In an article announcing the start of the sale, Amtorg’s commercial news outlet, the Soviet Union Review, gave Western firms the opportunity to remove all their competitors from the concession market^[40].

That year, the American architectural firm Albert Kahn Associates won an “initial order” of $2.8 billion (in 1928 dollars) to design all or part of the 500 industrial projects envisaged in the 1st and 2nd Five-Year Plans^[41]. All of these projects will be implemented, in whole or in part, by Western firms and then equipped with Western equipment, which will then require contracts with the West for maintenance and even for the training of Soviet engineers in the United States. Both Frayn and Kahn became members of the board of the State Institute for the Design of Metallurgical Plants (Gipromez), and Kahn’s chief engineer, George C. Scrimgeour, was appointed chairman of the State Design and Construction Bureau of the Supreme Council of the National Economy (Gosproektstroy)^[42] government.” He had the power of confiscation and expropriation; And the American architect was the chairman of his design and construction bureau.

From 1923 to July 1930, the Soviet regime purchased $518 million worth of U.S. goods and services ($9,634,800,000 in 2024 dollars). According to Amtorg, trade between the U.S. and the USSR was expected to grow to $200 million in the third year of the first five-year plan alone^[43]. Had the disastrous Stalinist agricultural collectivization, which was advised and provided for by American agricultural specialists and agricultural machinery companies, not for a devastating famine, this figure could have been reached.

However, thanks to the Soviet First Five-Year Plan and agricultural collectivization, U.S. exports to the Soviet Union jumped from $88.1 million in 1928 to $138.8 million by 1930 and $103.7 million in 1931. This was about 214 percent more than exports before 1914^[44].

However, the prominence of the Five-Year Plan was not due to the large volume of trade it generated for Western firms during the dark years of the Great Depression. News articles did not always pay attention to the fact that, according to the U.S. Chamber of Commerce data for January-June 1930, the Soviet regime was the sixth best buyer of U.S. products. that Soviet Russia ranked first as a buyer of U.S. agricultural machinery, or that it was the third largest foreign buyer of U.S. industrial machinery and the fifth largest buyer of U.S. mining and quarrying equipment, the fourth largest buyer of electrical equipment, the fourth largest buyer of metalworking equipment, the second largest buyer of U.S. construction machinery, the leading buyer of air compressors, and purchased American cotton^[45] $262,700,000 during a massive global economic downturn and devastating famine in Ukraine and the Caucasus.

The Western media only shed light on the intention during the Five-Year Plan to increase the output of heavy industry by an impressive 350% between 1928 and 1933^[46] and the intention in the process of Collectivization to increase grain production by 70% in just one year from 1929 to 1930, and not on how this would be achieved (through contracts with Western firms and massive purchases from them). However, the fact that the capital investments budgeted by the Soviet government in the First Five-Year Plan budget of 64,000,000,000 rubles ^{[47] [48]}(about $32.9 billion in 1928) were more than five times the pre-war GDP of Russia, And much of this money was allocated or already sent to American engineering and heavy industrial companies^[49], which meant that almost everything produced had to be exported and sold on the world market to collect cash to pay Western firms for equipment, licenses for production processes and services purchased to fulfill the Plan. In this sense, the First (and subsequent) Five-Year Plans were nothing more than an endless cycle of development and accumulation Debt.

Lack of diplomatic recognition:

exclusivity, secrecy and unregulated trading

The fact that all of this multibillion-dollar trade took place in the absence of diplomatic recognition from the U.S. makes it all the more remarkable. The U.S. government refused to recognize the Soviet regime for sixteen years, from the October Revolution of 1917 to the end of 1933, because of ideological differences. Yet, during these sixteen key years – key to the survival of the Bolshevik regime, which fiercely propagated its hatred of international capitalism – the largest American multinationals (as well as other Western multinationals) enjoyed some of the most grandiose contracts in their corporate history under the Lenin and then Stalin regimes. Western companies also participated in the formation and operation of Soviet industrial trusts, the “commanding heights” of the Soviet economy.

This was a truly revolutionary part of the October Revolution of 1917. The Soviet regime and its usurpation of control over the entire Russian economy through nationalization, the prohibition of domestic entrepreneurship to cleanse the domestic economy of competition, the reorganization of nationalized domestic enterprises into trusts and syndicates not only provided Western multinationals with a huge market for government contracts, but also cheap and abundant resources. Russian goods and resources were purchased for monetary units, now devoid of international value, and at prices determined by the state. The non-convertibility of the Soviet ruble essentially reduced trade between the Soviet regime and multinational firms to barter. It also made it possible to hide the exact value of the transaction for all but the parties involved. Since all resources and goods (except those produced under Western concessions) were collected by state trade organizations at fixed prices set by the state (usually at or below cost), Russian goods were now used to pay for Western equipment, goods, and maintenance, rather than to enrich the Soviet people^[50]. It was a system of complete subordination of the Soviet-Russian economy in order to enrich Western transnational corporations, carried out under the guise of the anti-capitalist ideology of Marxism-Leninism.

Exclusivity

In the absence of diplomatic recognition, the major contracts concluded between American firms and the Soviet regime were negotiated independently, outside the framework of traditional trade relations regulated by the government. These firms had to be able to negotiate directly with the Soviet regime—without a trade treaty establishing mutual rights and regulating the terms of the deal, without credit financing by the United States of the Soviets’ purchases of their products and services, or consulates to help find commercial opportunities in the Soviet market, arrange acquaintances with Soviet trade representatives, provide interpreters, and so on. attributes meant that a U.S. firm wishing to enter the Soviet market had to have the financial power to provide these usual conveniences on its own. These factors made trading with the Soviets an exclusive blue-chip game that occupied the “commanding heights” of Western capitalism.

Secrecy

It also meant that trade between U.S. firms and the Soviet regime was unregulated and completely private/secret, unless one of the parties decided to say so openly.

Since trade between the United States and the USSR was not protected by any trade treaty, was not supported by consulates, etc., it was carried out outside the sphere of activity of the US government. U.S. firms dealt directly with the Soviet regime and its organizations. Each firm negotiated its own contract, regardless of any strategy or goal of the U.S. government, which usually accompanies commercial relations once diplomatic relations have been established. This means that firms such as International General Electric, Standard Oil, International Harvester, and many others were essentially allowed during the first sixteen years of the Soviet regime to act on behalf of the U.S. government and the American people.

Trade between the Bolshevik regime and U.S. firms was carried out by four New York corporations run by the Soviet government:

Amtorg Trading Corporation, 165 Broadway Street, New York, was an American corporation that represented the major trusts, syndicates, trade agencies, and other Soviet economic organizations (with the exception of the All-Russian Textile Syndicate and cooperative organizations). Amtorg was the official sales agent of the People’s Commissariat for Foreign Trade in Moscow. sent by Moscow to direct its operations^[51]. In 1927-28, Amtorg purchased $33,100,000 worth of industrial equipment, agricultural machinery, nonferrous metals, etc., from American firms, a 27 percent increase over the previous year.

The All-Russian Textile Syndicate (ARTS), New York, 39 Broadway, was an American corporation that purchased $54.3 million worth of American cotton in 1927-28, a 23 percent increase over the previous year. It was headed by the American Alexander Gumberg, who was an interpreter at the American Red Cross Mission in Russia in 1917-1918.

Selskosoyuz-America, 90 West Street of New York, represented Soviet agricultural production cooperatives and purchased $5,400,000 worth of goods from American firms in 1927-28.

Centrosoyuz-America, 17 Battery Place, New York, represented the Union of Consumer Cooperatives. In 1927-28, the turnover of this company was $800,000.

The total purchases of these four firms in the United States amounted to $93,600,000 (about $1,740,960,000 in 2024 prices) in registered trade relations during the first year of the 1st Five-Year Plan (1928). This did not include trade carried out by those American firms that had entered into direct contracts with the Soviet regime.

Outside this unique trading structure, by virtue of special agreements, there were several American firms that did business directly with the Soviet regime:

• The New York branch of Standard Oil Co. (in 1927, John D. Rockefeller lent the Oil Syndicate of the USSR (Soviet Naphtha Syndicate) $10 million to improve the oil fields of Batumi and Grozny);^[52]

• Lena Goldfields Co. (British-American mining corporation);

• Allied American Corporation (Armand Hammer);

• Harriman Guaranty Trust-Tschemo AG;

• Russian-American Compressed Gas Co.;

• Freyn Engineering, Inc. of Chicago (architects);

• Albert Kahn Architectural Associates, Inc. (initial contract for $2.4 billion);

• Eitingon-Schild Co. (furriers);

• Hugh L. Cooper, Inc. (civil engineer for the $400 million Dniprostroy Hydroelectric Power Dam);

• Alcan Hirsch (chief consulting engineer of the Soviet Chemical Syndicate, (in 1933 alone, he supervised the import of chemical equipment from the United States in the amount of 2 million dollars).

In 1922, the American Bill Shatov was appointed “coordinator” of the American Autonomous Industrial Colony of the Kuzbass Coal Region, which was engaged in the development of the former tsarist mines in Kuzbass. The American colony reconstructed several mines, built and put into operation the first chemical processing plant in Russia, and organized an industrial agricultural farm. Shatov was also deputy chairman of the “State Association for the Trade of Petroleum Products for the By ^[53]1927, the People’s Commissariat of Railways (People’s Commissariat of Railways) appointed Shatov deputy People’s Commissar responsible for the construction of the Turkestan-Siberian Railway (Turksib).^[54] The length of Turksib was 2,375 km (1,476 mi), which was one of the largest infrastructure projects of the First Five-Year Plan.

Under Shatov’s leadership, the construction of the Turkestan-Siberian Railway cost about 162 million rubles ($82.6 million in 1927). Like the capitalists, whom he said he hated, Shatov cut wages in the spring of 1928 and then increased the working day to 10 hours in February 1929^[55]. Despite wage cuts (and famine), the Bolshevik regime allocated generous funds for the purchase of Western equipment^[56]. Shatov spent $2 million on American steam excavators, pneumatic drills, compressors, motorized cranes, excavators, stone crushers, concrete mixers, and other foreign construction equipment^[57].

Unregulated trading

Without a trade treaty establishing reciprocal rights and regulating the terms of trade, every foreign firm entering into a concession contract was free to negotiate an independent and private agreement with the Soviet regime. While firms had enormous financial resources, the Soviets controlled the vast natural resources obtained by nationalizing all property and enterprises of the Russian Empire. As stated in Lenin’s “Plan for U.S.-Soviet Economic Cooperation,” the Soviet regime paid for foreign goods and services by selling resources to Russia.

The sale of goods to pay for industrial equipment is a characteristic colonial method of international trade, especially because commodity prices depend on Western commodity markets such as the Chicago Mercantile Exchange (CBOT), the world’s oldest futures and options exchange^[58].

The four main resources that the Soviets sold to raise cash to pay Western firms were grain, timber, coal, and oil.

Under Lenin’s plan, the young Soviet regime offered American firms a share in the Soviet management of the huge Russian market—an inexhaustible opportunity for American capital to replace the large military orders of World War I. As soon as the titans of American business became financially involved in the Soviet economy, diplomatic recognition of the USSR became redundant. Moreover, recognition would bring an element of transparency to their activities. American multinational corporations were able to provide private loans to the Soviets for the mass purchase of their products, and private loans were private. If the Soviet regime had been recognized, U.S. (taxpayer) loans would have made the U.S.-Soviet trade process subject to public scrutiny. In fact, the U.S. government stood quietly on the sidelines while the largest and most powerful U.S. companies financially cooperated with the Soviet regime — in private, outside of traditional trade relations, and in a way that avoided public scrutiny. This initial sixteen-year relationship between the United States and the USSR was then conducted without the main tool of foreign policy: diplomacy. Due to the non-recognition of the Soviet regime by the United States, diplomatic channels did not exist between 1917 and 1933. The astonishing commercial relations that took place at this time were conducted not through U.S. government officials and their Soviet counterparts, but privately and independently, between the owners and representatives of American multinational companies and the Soviet regime. The first sixteen years of relations between the United States and the USSR were in fact exclusively commercial relations.

Why was there no consumer market?

In fact, there was not a single branch of the Soviet economy that was not touched by the largest Western firms, with one notable exception: consumer goods.

During the nearly seventy-four years (1917-1991) of the Soviet Union’s existence, it was widely believed that Soviet Russia had retreated from international trade, especially with the capitalist West. Soviet Russia was considered a closed market, isolated from Western firms.

Tomáš Evan’s 2014 work Chapters of European Economic History (p. 61), which is often quoted and recited on websites including Wikipedia and other publications, states: “Revolutionary Russia completely fell out of the world economy and locked itself in an isolation that had not been broken until hostilities with other countries during World War II [1939-1945].”

A number of factors contributed to the spread of these lies:

• The public bile of the Soviet regime against capitalism.

• Lack of a consumer market.

• The refusal of the U.S. government to grant official diplomatic recognition to the Soviet regime for sixteen years (until 1933).

• Inconvertibility of the Soviet ruble.

• Soviet people were forbidden to leave the Soviet Union, contact with Western citizens and culture; Except for capitalist business organizations such as trusts, syndicates, and production processes such as assembly line, mass production, Fordism, Taylorism, etc.

• The secrecy with which Western firms participated in the Soviet economy.

The Soviet market was not intended for broad free enterprise; not because of any anti-capitalist beliefs, but in order to ensure that all the resources of Soviet Russia would be used for domestic industrialization (carried out by Western firms) or sold on the cheap on the world market. The highly centralized Soviet command economy was designed to sustain and enrich Western industrial economies by selling Russia’s resources at the lowest possible price to foreign firms and sending hard currency derived from export sales back to foreign countries to purchase their goods and services. The consumer market would require too much of Russia’s own resources, intended exclusively for export, and domestic demand for these resources would raise their price. Moreover, the consumer market would be too obvious an endorsement of capitalism to lend credibility to the Marxist-Leninist ideology used to explain other important policy decisions.

Consumer goods, all but the most basic ones, create a market that is too ungoverned (“free enterprise”) that can allow hundreds of thousands of competitors to gain access to this new system of neocolonialism. Also, the consumer market would create a demand for labor that is outside of state control (wage increases), take too much capital out of state control, and compete with foreign concession projects. The Soviet economy was not designed to be a market open to every entrepreneur with a new idea, capable of generating new projects and competition for Russia’s resources and infrastructure, which could challenge the established dominance of Western multinational companies.

Soviet monopoly on trade = industrial market, previously monopolized for American companies threatened by US antitrust laws

The revolution in international trade wrought by the Soviet regime occurred shortly after the passage of the Sherman Act of 1890, the Clayton Act of 1914, and the Federal Trade Commission Act of 1914, which prohibited price fixing, cartels, and other collusive practices that substantially reduced competition and created monopolies. These statutes, collectively known as the U.S. antitrust laws, prohibited monopolization, which caused damage with its consequences in the form of economic stagnation. Many of the largest U.S. multinational companies that flocked to the revolutionary Soviet market, such as Standard Oil, were also corporations threatened by U.S. antitrust laws and growing sentiment against the giant companies that had made exceptional profits from war production during the unprecedented carnage of World War I^[59].

The Soviet market was not only organized according to the very paradigms of monopoly capitalism – trusts and syndicates, banned in the United States – but also free from representative democracy and competing firms that could protest against their predatory activities; as it happened in the United States. Just one signature on a contract with the Soviet regime, and Russia’s enslaved market was theirs.

The lack of official diplomatic recognition also required that companies wishing to do business with the Soviet government be able to arrange private credit for the Soviet regime^[60]. As long as the Soviet regime remained diplomatically unrecognized, the U.S. government could not provide the credit it approved to the Soviets to buy goods and services from American firms, as is usually done after a country’s government receives diplomatic recognition. In 1927, John D. Rockefeller’s Standard Oil Company granted the Soviet Naphtha Syndicate a $10 million loan to improve the situation in Batumi and Grozny in exchange for the use of the Batumi Oil Refinery for 6 years^[61]. for both the Soviet regime and the United States, as both Great Britain (under the Anglo-Soviet trade agreement) and Germany (under the Treaty of Rapallo of 1922) offered loans to the Soviet government to purchase goods and services from their firms. The financial stress of selling resources in a severely subdued commodity market during the Great Depression (1929-1939) to pay for massive purchases of Western products as part of the First Five-Year Plan and the collectivization campaign (1928-1940) forced the Soviet regime to triple and account for the proposed sales of inputs, especially grain, in order to keep up with the payment schedule to American creditors. When grain exports had to be increased to pay American creditors during the famine caused by the U.S.-recommended collectivization campaign, which resulted in 5.7^[62] to 8.7^{[63] [64]}million deaths, this factor, although apparently never discussed publicly, led to the decision in 1933 to grant official diplomatic recognition by the U.S. government to the Soviet regime. Shortly after the recognition was granted, the Export-Import Bank was established to process loans to the Soviet regime. purchases of the Soviet Union (and other countries) from American firms^[65].

Under the Soviet monopoly on trade, centralized control of the Russian economy passed to multinational companies as soon as they became Soviet “state contractors.” Since the Soviet market was devoid of internal competition and organized into state industrial trusts, as soon as foreign firms became part of the Soviet industrial trust, they enjoyed the monopoly belonging to this trust.

The Soviet regime was also financially and materially responsible for the entire spectrum of the supply chain (at state prices): transportation, warehousing, procurement of raw materials and, most importantly, labor, which it also effectively nationalized and was responsible for paying wages. These privileges that the Soviet regime offered to Western corporations were quite unique in the history of international commercial trade.

No customs duties

Customs duties or import/export duties are taxes levied on imports or exports and are designed to protect domestic industries from foreign manufacturers who can flood the country with imported goods and destroy nascent domestic businesses. This is where the word “protectionism” comes from in relation to international trade.

Mass-produced multinational companies need open world markets to maintain the flow of goods and profits, however, when foreign countries resort to “protectionism” by imposing tariffs on imported products or on exported products, making them more expensive to protect domestic industry or resources, the world market shrinks. As soon as the domestic markets of multinational companies are saturated, or even earlier, they need foreign markets to maintain a stable profit margin and suppress any emerging competition.

Since the Soviet regime had destroyed all domestic enterprises, there was no need to impose tariffs on foreign imports to protect domestic industry, which would not have existed without the participation of Western firms. If Soviet trusts were in fact “Soviet” and not filled with foreign capital, customs and import duties would be necessary. The inability to impose duties on foreign goods also deprived the Soviet government of a source of income, which further impoverished the population of the USSR.

Export duties can also be imposed on domestic resources such as platinum, oil, timber, grain, etc., to keep enough of them domestically to maintain both economic viability and domestic resource security. Export duties were to be imposed on Soviet resources in order to keep enough of these resources domestically to maintain a healthy domestic economy and for the comfort and well-being of Soviet citizens.

The Soviet Union also avoided export duties. In fact, the Soviet Union sold its resources, such as grain, timber, and oil, in such large quantities, and often at or below cost^[66], that its own population was forced to do without them.

Inconvertibility of the Soviet ruble^[67]

The ruble has been used in Russian territories since the 14th century^[68] and is the second oldest monetary unit after the pound sterling^[69], which is still in circulation. Originally not minted as a unit of account, the ruble became a circulating coin in 1704, just before the creation of the Russian Empire. The first paper ruble was issued in 1769^[70].

After the abolition of serfdom in 1861 and the removal of most restrictions on credit and investment activities, Russian society turned to capitalism, and the value of the ruble became one of the key parameters of everyday life. However, nationalists complained that the international exchange rate (set by Western banks) was a form of dependence on Western financial institutions, which affected the amount of income received from grain exports. and external debt service costs. In 1839, the silver standard of the Russian ruble was established, but in 1897 the ruble was put on the gold standard Pravilova, Ekaterina, The Ruble: A Political History (2023), Oxford Univ. Press, p. 6^[71]. The monetary reform of 1895-1897, led by Finance Minister Sergei Witte, freed the ruble from silver and pegged it instead to gold. when it became clear that Russia’s own gold resources were almost limitless. Established by a tsarist decree in violation of all legislative procedures and called a “monetary coup”, the transition to gold protected the ruble exchange rate from constant fluctuations, strengthened the ruble in the world market and increased foreign investment in Russia.

At the beginning of the October Revolution, Lenin declared that the ruble was a weapon of class struggle used to expropriate wealth from the enemies of the working people. However, the revolution in finance did not take place^[72]. Instead, the Bolshevik regime imposed on Russia a grotesque violation of international trade precedent.

While War Communism (1918-1921) wiped the Russian ruble off the world trade board, the monetary reform of 1921-1924 allowed the Soviet regime to embrace Keynesian economics (before it became popular in the West), allowing the government to print money without backing it with gold in the Treasury, essentially creating fiat money^[73]. (The minting of Soviet coins was even transferred under contract to the British Royal Mint). The more rubles the Soviets printed, the less they were worth, and in the 1920s, inflation in Soviet Russia became rampant.

According to the American journalist H. R. Knickerbocker, who visited Soviet Russia in 1931:

“In the first year of the [first] five-year plan, the currency rose by a third with a new issue of 638,000,000 rubles. In the first eleven months of the second year of the plan, the money supply increased by another eighty percent compared to the previous year, with a new issue of 1,762,000,000 rubles. In the twenty-three months from October 1928 to September 1930, the money supply increased two and a half times, with a total new issue of 2,400,000,000 rubles.

… [This] phenomenon has never before been observed in a country’s monetary system, not even in Germany during its astronomical inflation. Whole series of banknotes are issued, all with the same serial number. Up to 1000 one-, three- or five-ruble banknotes are issued, each with the same number. … The amount of money in circulation has already increased by 250 percent. … Since 1928, the standard of living has declined by at least 60 percent, even with twice the cost of money. The Soviet Union sells products abroad at a price below cost. Nevertheless, it must be admitted that the value of the ruble is so uncertain and so far below its face value that there can be no accuracy in estimating its real value.”^[74]

“Coincidentally,” this Soviet policy directly reflected the policy of the German agent Alexander Gelfand (Parvus), who advised Lenin to destroy the value of the ruble and its credibility^[75]. It is also believed that this led to the dismissal of the People’s Commissar of Finance N. P. Bryukhanov and the chairman of the board of the State Bank G. Pyatakov in 1930^[76].

The deliberate destruction of the value of the ruble ensured that transactions between foreign firms and Soviet foreign trade organizations would be conducted in foreign currency (or some abstract unit of value, usually barter) and would not use an explicit exchange rate^[77].

According to the report of the staff of the International Monetary Fund “The Soviet Price System and the Exchange Rate of the Ruble” (1950):

“In view of the method of pricing in the USSR and the fact that domestic prices are ‘protected’ from external influence, any similarity between the price models in the USSR and in other countries cannot be anything but a mere coincidence. A single exchange rate was not applied to foreign trade operations. The [Soviet] exchange rate, in fact, does not matter in foreign trade operations. It in no way serves as a guide in making foreign trade decisions. If it were used for this purpose, it would have to be made at a price that the ruble exchange rate does not correspond to.

The only use of the official exchange rate in the USSR was the conversion of foreign exchange reserves into rubles in order to make them an item formally comparable to other items in the balance sheet of the State Bank. The official exchange rate does not reflect the average value of the ruble. While the official exchange rate of the ruble is irrelevant in foreign trade transactions, it is important in transactions with foreigners who buy consumer goods and services within the USSR at retail prices and pay in rubles. …

In fact, after July 1, 1950, only one exchange rate was set for the Soviet currency, 4 rubles to 1 U.S. dollar. Prior to June 30, 1950, there were two exchange rates: one official, 4 rubles to the U.S. dollar, which was derived from the declared gold content of the ruble, and the other preferential, 6 rubles to the U.S. dollar, which was called the “diplomatic” exchange rate^[78]. However, the existence of two exchange rates did not necessarily mean that there was a correspondence between exchange rates and prices in the USSR and abroad; nor did it prove that decisions regarding individual international transactions were based on prices in the USSR and abroad. Even an approximate correspondence between exchange rates and price levels in the USSR and abroad could only assume, but not prove, that exchange rates actually applied to individual Soviet international transactions. In fact, there was no such correspondence.”

In this document, IMF staff conclude that “the official exchange rate of the ruble does not matter for the purposes of foreign trade.”

Any aspect of commercial transactions between the Soviets and the multinational corporations was excluded from the traditional global capitalist system, with the exception of two crucial points: the cost of foreign products, licenses, and services, and the price paid for Soviet resources on the international market, both of which were determined by Western financial markets; and none of them worked in favor of the Soviets.

As part of the campaign of “War Communism” (1918-1921) to deconstruct (through nationalization) and reorganize existing enterprises into industrial trusts and syndicates, both domestic and export pricing—instead of being formed naturally in the market—was completely subordinated to state regulation. Within the country, official price lists were drawn up with fixed prices for all goods and services, which were declared mandatory and not subject to change. This method of pricing was similar to the one used by capitalist countries in wartime under the conditions of the “war economy”. And it further limited the opportunities for domestic entrepreneurs.

In capitalist countries that have not gone through a “war economy,” the difference between wholesale and retail prices does not differ much from country to country. This facilitates the use of common exchange rates in economic relations between countries. However, the comparative range of prices for the USSR was large, which made it almost impossible to determine the foreign value of the Soviet currency. Since the ruble was not a subject of trade on the international market, its value could be arbitrarily fixed. By abandoning the convertibility of the ruble, the Soviet regime further undermined Russia’s ability to participate in foreign trade without benefiting from it. As the American journalist H. R. Knickerbocker described during his stay in Soviet Russia in his report on the First Five-Year Plan:

“Instead of paying for each ton of imports of a ton [or more] of exports, as the Soviet government is forced to do today, it could pay in its own currency and have a margin, like every bourgeois country that can maneuver when its foreign trade is slightly out of balance.”^[79]

The Soviet monopoly of foreign trade was a system in which Russian resources, agricultural products, and other goods were “bought” (perhaps a more appropriate definition would be “taken”) by state-owned export organizations such as Amtorg and ARKOS at delivery prices. Soviet foreign trade organizations received Soviet products for export at cost. Prices for exported inputs and goods were then arbitrarily negotiated by state export organizations and Western firms with which they negotiated; And, as a rule, they were kept secret. It was not only a system akin to neocolonialism, it was an advanced neocolonialism. The Soviet regime extracted Russia’s resources, paid its own organizations and workers as little as possible, and then sold these products and resources privately or on the world market at the lowest possible price. The money received from these sales was not reinvested in the Soviet economy, but was used to buy Western goods, so that the Soviet treasury practically did not accumulate Western currency. Meanwhile, the Soviet economy served as an internally controlled market (devoid of competition) for the open expansion of Western industrial firms. This was the revolution in international trade advocated in Lenin’s Plan for American-Soviet Economic Cooperation. For the first time in history, every contract concluded with a foreign firm could be individually negotiated, all prices would be negotiable and kept secret, and would have nothing to do with supply and demand in the international capitalist system. The only factor influencing would be the relative bargaining power of the parties to a particular private trade agreement.

Lenin and the Bolsheviks claimed to be building a new society created for the working class. Their eloquent and emotional appeals to the “masses” were aimed at enlisting the tacit support of the majority of the Russian public and diverting attention from the real end results of their actions. It will be a new economy run by workers and created for workers. It was heralded as a solution to the growing concentration of power by the titans of industry and finance capital and their domination of governments and society.

The German socio-economic theory of Marxism was used as a justification for the decisions of the Bolsheviks affecting the Russian economy, society and the individual. When politics and Marxist theory could not come to an agreement, “Leninism” arose as an “interpretation” of Marxist theory, and the departure from Marxism was explained by the transition to the establishment of communism.

However, Marxism (like any ideology put forward by any government) was used to divert attention from the underlying motives of the decisions that led to the unprecedented strengthening of the state. This structural concentration led to the absorption of all Russian industry and resources by trusts and syndicates during “War Communism” (1918-1921). The centralized command economy was designed – not to protect Russia from exploitation by Western capitalist corporations, as the leading Bolsheviks claimed, but to create a neocolonial system in which Russia, its market, its people and its resources were held captive by them. Russia’s territorial size, unprecedented quantity and quality of resources, incomparable geo-commercial position, and a developing economy on the verge of expanding into Asia, India, the Middle East, Persia, the Mediterranean, and Europe thanks to the completion of the Trans-Siberian Railway, made Russia a desirable (and strategically necessary) target for the West, first for Germany under its September Program, and then, at the end of World War I, for the Allies.

The Soviet economy under Bolshevik rule was a revolution in international trade due to the following factors:

• All internal entrepreneurial competition was methodically eradicated and declared illegal, the punishment for disobedience was forced relocation, forced labor or death.

• The Soviet economy was from the beginning oriented towards exclusivity: open only to the titans of Western capitalism involved in the “commanding heights” of industry (who had the financial power to participate in the unregulated market and provided private financial loans to the Soviet regime until 1933).

• The Soviet economy not only allowed, but also provided, pre-organized industrial trusts and syndicates—banned in the United States by the U.S. antitrust laws of 1890 and 1914—at the disposal of the titans of Western industry.

• The Soviet trade monopoly created a single buyer/seller for the entire Soviet economy.

• The Soviet state, having a monopoly on foreign trade and control over the entire Soviet economy through its trusts and syndicates, transferred this monopoly control to Western firms through concession contracts and participation in Soviet trusts and syndicates.

• The Soviet economy was an “open door” that provided equal (but exclusive) access to the titans of Western industry, regardless of national origin. (The “open door” here refers to the “open door” policy of the United States, which was originally applied to China in 1899, designed to prevent the creation of exclusive “spheres of influence” by the imperialist powers, as happened in China in the 19th and early 20th centuries, which prevented the United States (as a latecomer to the division among the imperialists) from selling its products on the Chinese market. which was dominated by the “spheres of influence” of Great Britain, Germany, France and other countries.

• The non-convertible ruble: The removal of the ruble from the world currency exchange created a system of trade outside the global capitalist system, reducing each of the hundreds of concession contracts with Western firms to barter (which prevents posterity from knowing the exact figures of the transactions).

• The Soviet state trade monopoly created a system that bought its own products and resources at state prices (usually at cost) and sold them on the international market to private foreign firms or domestic state-owned enterprises at prices that were completely arbitrary, independent of the official exchange rate. It was an advanced neocolonial trading system designed to siphon Russian resources to the West and open up the Soviet industrial market to Western corporations for exploitation, while avoiding costly foreign occupation and the perceived loss of sovereignty.

• Absence of import and export customs duties and duties on the products of foreign companies involved in deliveries to the Soviet market. As the Soviet state destroyed domestic industry, there were no domestic firms that could be protected from the influx of Western industrial, agricultural, automotive, aviation, chemical, food, mining, manufacturing (and later office) equipment, goods, services, licenses, and patents.

• The developing economy of the Russian Empire, its unprecedented geo-commercial position between Europe, the Mediterranean, Persia, India, all of Asia, and much of the Arctic, its abundant and high-quality resources, and its 180 million people transformed itself from a threat to Western dominance in world trade into a controlled exclusive market that could be used to enrich Western corporations^[80].

Some of the major consequences of this revolution in international commercial relations are:

• The economic benefits of this exclusive system all but guaranteed that those foreign companies that were allowed to enter it would gain the additional financial power gained by monopolizing their respective branch of the Soviet industrial market, monopolizing their domestic markets (through mergers and acquisitions) – and since this would be considered a policy of an unruly foreign regime, as well as, in fact, a secret, no one in the Western domestic market would be able to In ^[81]other words, the power that these firms acquired by dominating foreign markets was legitimately used to maintain dominance in the Western market.

• Russophobia served the purpose of keeping the Soviet Russian market closed to anyone who was not part of the exclusive commercial club of the financial and business elite. It created universities without Russian departments. It kept the number of people studying in Russian at a minimum. She kept trips to Russia to a minimum. It left journalists without real sources from which to draw reliable information. And it kept the world population in the dark about the commercial forces involved in managing the national economies of other countries, in stifling their economic development and keeping the “underdeveloped” countries in an underdeveloped state.

• The nationalization of industry cost the Bolshevik government 1,210,000,000 rubles, most of which was spent on political measures; primarily on the accommodation of Red Army soldiers in the most troubled factories^[82], which suggests that this was not as cordially received by the Russian workers as most history books (Western and Soviet) would have us believe.

• Destruction of the nascent Russian economy.

• The immeasurable destruction of global human potential through the suppression of competition and invention, not only in Soviet Russia, but in all countries where Western firms gained the upper hand in trade through these methods.

Foreign participation in Soviet industrial corporations

As soon as the Bolsheviks seized power in October 1917, they immediately set to work dismantling the Russian economy. Under the guise of building socialism, Bolshevism called for a rigidly centralized economy. Using German Marxism as the basis for all economic and social policy decisions, Lenin argued that by destroying capitalism within Russia and all domestic entrepreneurs, by outlawing entrepreneurship and private property, he was purging Russia of all inequality in preparation for socialism, which would lead to a communist society where real democracy would flourish.

However, it was not a matter of the promised end result of a better life for Soviet citizens (which received the most press coverage, both in Soviet Russia and abroad), but in the dismantling of the nascent Russian economy and its reconstruction into centrally controlled industrial trusts and syndicates, where the state dictated what was to be produced, bought domestic products at prices set by the state in non-convertible currency, and seized a complete monopoly on trade with the Soviet Union. foreign firms.

During the “War Communism”, which was initiated in June 1918 by the Supreme Council of National Economy (VSNKh), the Bolshevik regime forcibly nationalized all enterprises and property. Enterprises were purged of their owners with the promise of workers that they would manage the enterprises and manage them independently, within the framework of a system of equality. However, the former owners were quickly replaced by government representatives instead of workers; They explained this by the fact that the workers were “inefficient”. Each enterprise was placed in a centralized economic system according to the industry; That is, all enterprises engaged in the production of electrical appliances were organized into the Main Electrotechnical Directorate (Glavelectro) of the Supreme Council of the National Economy of the USSR, all oil-producing enterprises were organized into the Oil Syndicate (Petrosyndicate) of the USSR, etc. In fact, the Bolsheviks carried out hostile takeovers of all domestic and some foreign enterprises and united them into state monopolies.

Scholarly works on the Soviet economic system rarely, if ever, mention the industrial trusts and syndicates within which nationalized enterprises were organized. Centralized, under the control of the government, trusts, and syndicates, industries such as heavy industry, chemical production, mining, energy, agriculture, and transportation constituted the “commanding heights”—as Lenin called them—economies. Trusts and syndicates also organized and directed the production and consumption of their respective industries within the framework of the “command economy.” This type of intensive central economic organization was usually present only in the economies of states experiencing total war. The consolidation of industrial trusts allowed the Soviet regime to control all aspects of the Russian economy for three years (1918-1921). This in itself was revolutionary in the history of the economy, especially in an area covering 1/5 of the Earth’s land area, which is still unrivaled in resources. However, an Internet search for “Soviet Industrial Trust” in the Encyclopedia Britannica yields no results. There are three paragraphs of vague explanation on Encylcopdia.com. Wikipedia is uncharacteristically silent. None of JSTOR’s scientific articles contain anything about Soviet industrial trusts.

Soviet industrial trusts were the key to the development of the socialist economic system, the most revolutionary economic experiment in human history; So why are they treated as if they never existed?

This may be because, while the U.S. and other countries publicly denounced the barbarity of the Soviet regime and refused diplomatic recognition because of ideological differences, the founders and board members of Soviet industrial trusts—the core of the Soviet economy—were not only among the Fortune 100^[83] largest companies in the world by revenue (for the 1920s), but were also the same firms. that supported the economies of Western democracies:

The Metal Trust (Metallostroy)^[84] was affiliated with Harriman-Guaranty Trust-Tschemo AG.

The “Oil Syndicate of the USSR” (Oil Syndicate) received a $10 million loan from Rockefeller’s Standard Oil in 1927.

The chief consultant of the Chemical Syndicate (Chemsyndicate) was the American chemist Alkan Hirsch. In 1932, $2 million worth of American chemical equipment was imported into the Soviet Union. In 1933, at the height of the famine, another $500,000 worth of equipment was imported^[85]. Chemical giant DuPont built chemical plants as part of the First Five-Year Plan.

The State Institute for the Design of Metallurgical Plants (Gipromez) had direct contracts with Freyn Co., Inc. of Chicago and the American firm Albert Kahn Architectural Assoc. worth more than $2.8 billion (in 1928 dollars) for the design, construction and equipping of more than 500 industrial enterprises within the framework of the 1st and 2nd five-year plans^[86].

The State Design and Construction Bureau of the Supreme Council of National Economy (Gosproektstroy) was headed by the American chief engineer of Albert Kahn Assoc, George C. Scrimgeour.

The All-Russian Textile Syndicate (VTC) was headed by former members of the American Red Cross Mission (1917-1918) Alexander Gumberg, Thomas Thacher, and Chase National Bank vice president Reeve Schley, who in 1923 banded together to establish and finance WTC offices in New York City, which bought American cotton^{[87] [88]}, and the list goes on.

U.S. Companies Seek Foreign Markets to Monopolize

In the U.S., many of the most powerful corporations that emerged after the Second Industrial Revolution (1870) banded together in trusts to control prices, market share, and/or create a monopoly in order to eliminate (and destroy) competition and thereby obtain higher prices for their products, reduce the competitive need for research and development, innovation, quality control, customer satisfaction, and employee welfare. Trusts also threatened to lead to national economic stagnation by suppressing competition and discouraging innovation. Trusts have been the tools of the most powerful corporations to maintain and expand their influence over the market and, more importantly, over government and society through ever-increasing financial power—to the detriment of employees, consumers, representative government, and the national and global economic system.

As a result, trusts were banned^[89] by the U.S. Congress under the Sherman Act of 1890, the Clayton Act of 1914, and the Federal Trade Commission Act of 1914. U.S. companies that were the subject of antitrust investigations included Swift & Co. (Meatpacking) in 1905, John D. Rockefeller’s Standard Oil of New Jersey in 1911, and the American Tobacco Company also in 1911. aluminum) in 1945 and E. I. Du Pont de Nemours & Co. (chemical industry) in 1956, as well as many others who were charged and/or found guilty of conspiring to control the U.S. market. It is no coincidence that these powerful American firms (and many others) were also represented in the American Red Cross Mission in Russia (1917-1918) they created, and then in the boards of Soviet industrial trusts in the 1920s. Taken away from their owners, the former enterprises of the Russian domestic economy were organized into trusts, and these trusts were grouped into syndicates, which were then transferred to the largest Western transnational corporations in the form of concessions and/or membership in the boards of these trusts. Some nationalized foreign enterprises were returned to their original owners as concessions; This time, the Soviet government (the Soviet people) paid for the replacement of obsolete and damaged equipment, since these objects were now considered state property, but leased for 99 years under a lease agreement of a transnational corporation, under which it could receive unlimited profits.

Standard Oil and Royal Dutch Shell bought up the property of Russian oil companies during nationalization, and then, during the 1922 Genoa Conference, fought over who would get the lion’s share of the Soviet oil industry. Later, the Soviets changed their own property laws to guarantee such foreign firms exemption from nationalization and a 99-year lease on plots of land, such as the Gigant collective farm. an area in the Rostov region the size of the state of Rhode Island, which was ruled by American agricultural specialists and representatives of agro-engineering companies in the period from 1928 to 1933^[90].

Soviet authorities,

superior to Soviet trusts and syndicates

The Politburo (Politburo) was the highest political organ of the Central Committee of the Soviet Communist Party. The first Politburo consisted of seven members representing the political elite of Soviet Russia: Vladimir Lenin, Grigory Zinoviev, Lev Kamenev, Leon Trotsky, Joseph Stalin, Grigory Sokolnikov, and Andrei Bubnov.

The Council of People’s Commissars, the Council of People’s Commissars, was the highest executive body of power from 1917 to 1946. It consisted of commissioners for agriculture, education, finance, communications, foreign affairs, etc.

The Supreme Council of National Economy (VSNKh) was established on December 5, 1917 by a decree of the Council of People’s Commissars (Sovnarkom) and the All-Russian Central Executive Committee of Soviets. Its stated purpose was “to plan the organization of the country’s economic life and the financial resources of the government.”^[91] In 1928, at the beginning of the First Five-Year Plan, the Construction Committee of the Supreme Council of the National Economy was created, headed by George C. Scrimgur, chief engineer of the American firm Albert Kahn Architectural Assoc., to design, build, and equip about 500 industrial facilities. Kahn’s contract was for $2.8 billion in “initial orders” for the 1st and 2nd Five-Year Plans^[92].

GOSPLAN, the State Planning Committee, functioned from 1921 to 1991. The main task of the State Planning Committee was to create and administer subsequent five-year plans governing the Soviet Russian economy.

The 1st five-year plan provided for capital investments of more than 2.7 billion rubles in steel mills, equipment and technical assistance and almost 300 million rubles in ore mining^[93].

References

1. Krechetnikov, Artem (7 July 2016). Ruble: one name for 700 years and 21 more facts. BBC News Russian Service. Archived from the original on 10 July 2018. Retrieved 31 October 2018.

2. Borah, William. “The Soviet Government” Senator William Borah, Congressional Record—Senate, 73rd Congress, 3rd Session, 3 March 1931, p. 7039.

3. Brinton, Maurice (1970). The Bolsheviks and Workers’ Control: The State and Counter Revolution. London: Solidarity.

4. Bron, Saul G., ‘Soviet Economic Development and American Business’, (1930) Horace Liveright, New York.

5. “Collectivization and Industrialization”. Library of Congress. Retrieved 17 April 2014.

6. Davies, Robert W.; Wheatcroft, Stephen G. (2010). The Industrialization of Soviet Russia Volume 5: The Years of Hunger. Palgrave Macmillan. p. 415. doi: 10.1057/ 9780230273979. ISBN 9780230238558.

7. Delisle, Jason; Papagianis, Christopher, 29 March 2012. “Critics of the Export–Import Bank Have a New Weapon at Their Disposal: Fair-Value Accounting”. – Economic Policies for the 21st Century. The Manhattan Institute.

8. Dorn, Harold. Hugh Lincoln Cooper and the First Détente, Technology and Culture, Vol. 20, No. 2 (Apr. 1979), Johns Hopkins University Press, pp. 322-347.

9. Engelbrecht, Helmuth Carol, Hanighen, F. C. (1934). Merchants of Death: A Study of the International Armament Industry.

10. Falkus, M.E., Russia and the International Wheat Trade 1861-1914, Economica, 1966.

11. Gilbert, Charles, American Financing of World War 1, (1970), Westport, CT, Greenwood Publishing Corp.

12. Hirsch, Alcan. Industrialized Russia. (1934).

13. Hulse, James W. The Forming of the Communist International. (1964) Stanford, CA: Stanford University Press.

14. International Monetary Fund Staff Papers: Volume 1, No. 2 , The Soviet Price System and the Ruble Exchange Rate, 1 Jan 1950, eISBN: 9781451971422, IMF eLibrary, https://www.elibrary.imf.org/view/journals/024/1950/002/article-A002-en.xml

15. Knickerbocker, H.R., The Soviet Five Year Plan and its Effect on World Trade, (1931) London.

16. Libbey, James, K., Alexander Gumber & Soviet American Relations 1917-1933, (1977).

17. Manaev, G., Was Nicolas II Really One of the Richest Men in History?, Russia Beyond, (July 2018), https://www.rbth.com /history/328825-was-nicholas-ii-richest-man-world

18. Montefiore, Simon Sebag, Stalin: The Court of the Red Tsar, (2004), New York, Knopf.

19. O’Connor, Marion A., World Wheat Supplies 1865-1913, Unpublished discussion Paper No. 12, (1970), Princeton, NJ.

20. Owen, Thomas C., Russian Corporate Capitalism from Peter the Great to Perestroika, (1995), New York, Oxford University Press.

21. Payne, Matthew, Stalin’s Railroad: Turk sib and the Building of Socialism, State Archive of the Russian Federation, University of Pittsburgh Press, (2001).

22. Pravilova, Ekaterina, The Ruble: A Political History (2023), Oxford Univ. Press.

23. Ropes, Ernest C., “The Shape of United States-Soviet Trade, Past and Future,” (Aug. 1944), The Slavonic and East European Review, Vol. 22.

Rosefielde, Steven (Sep 1996). “Stalinism in Post-Communist Perspective: New Evidence on Killings, Forced Labour and Economic Growth in the 1930s”. Europe-Asia Studies. 48 (6): 959–987. doi:10.1080/09668139608412393.

24. Rozengoltz, A. R. “Foreign Trade Policy of the USSR”, Speech made by People’s Commissar for Foreign Trade Arkady Pavlovich Rozengoltz as reported in the Soviet Union Review, Vol. XI, No. 6, June 1933, pp. 123-127.

Russian ruble facts. Archived from original 5 February 2022. Retrieved 5 February 2022.

25. “Shatoff Made Assistant Railroad Commissar,” Miscellaneous News, February 1932, Soviet Union Review, P. 45.

26. Soviet Union Review, November 1928, Vol. VI, No. 11, “The New Concession Policy of the USSR,” Soviet Union Information Bureau of the Soviet Trade Delegation in Washington, D.C., pp.159-163.

27. Soviet Union Review, Vol. V. No. 7-8, July 1927.

28. Strong, Anna Louise, “THE ANARCHIST WHO BUILDS AN EMPIRE; Bill Shatoff, Agitator in America, Is Driving a Railway Through a Desert to Make New Wealth for Russia.” The New York Times, 9 March 1930.

29. Sutton, Anthony, Western Technology and Soviet Economic Development, 1917–1930. Stanford, CA, Hoover Institution (1968).

30. Sutton, Anthony, Western Technology and Soviet Economic Development, 1930–1945. Stanford, Calif.: Hoover Institution (1971).

31. “U.S. Anarchist to Rail Magnate: A Russian Story,” Daily Tribune (Chicago, 12 March 1928), p. 15.

32. Wolowyna, Oleh (Oct 2020). “A Demographic Framework for the 1932–1934 Famine in the Soviet Union”. Journal of Genocide Research. 23 (4): 501–526. doi:10.1080/14623528.2020.1834

1. Preface to the book by L. G. Gavrilova “American-Russian Trade and Industrial Relations 1763-1933”. ↑

2. “Soviet Russia” and “Russia” in this volume refer to the entire territory covered by the Russian Empire before its collapse after 1917 and the re-collapse of the USSR after 1991, including Eastern Europe (Ukraine and the Baltic States, the Caucasus), Kazakhstan, Uzbekistan, and Tajikistan, etc. ↑

3. Lenin ceded the area to American citizens in 1921, including all factories and plants, up until 1927. This is described in the chapter “Kuzbass – American Autonomous Industrial Colony”. ↑

4. Manaev, G., Was Nicolas II Really One of the Richest Men in History?, Russia Beyond, (July 2018), https://www.rbth.com /history/328825-was-nicholas-ii-richest-man-world ↑

5. Falkus, M.E., Russia and the International Wheat Trade 1861-1914, Economica, 1966, pp. 416-429. ↑

6. O’Connor, Marion A., World Wheat Supplies 1865-1913, Unpublished discussion Paper No. 12, (1970), Princeton, NJ. ↑

7. If you take into account inflation of $29.93, then by 2022 the figure would be $23.992 trillion per year. ↑

8. US Department of Agriculture. National Agricultural Statistics Service. Washington Field Office. www.nass.usda.gov PRICES RECIEVED – ALL WHEAT, Washington. DOLLARS PER BUSHEL. 1910 – 2010. www.google.com/search?q=Price+of+bushel+of+wheat+in+1913. ↑

9. Owen, Thomas C., Russian Corporate Capitalism from Peter the Great to Perestroika, (1995), New York, Oxford University Press. ↑

10. Hereinafter, the names of transnational corporations are given in the original language without quotation marks (editor’s note). ↑

11. After the human losses in the First World War, during the purges of the 1930s, 18 million people sent to the Gulag, losses in the Second World War, by the end of the 1980s, the population of the USSR reached only 288 million people. If there was ever a way to destroy a nation’s potential, it seems too systematic to be an accident. In 2021, the population of Russia was 143 million people, including in the former republics: Ukraine – 43.7 million, Kazakhstan – 19 million, Uzbekistan – 34.9; A total of 241 million. Teri’s predictions never came true due to wars and other methods of reducing the population of Russia, so “domination in Europe” was not allowed. ↑

12. Emmerson, (2013). ↑

13. A hostile takeover in economics is a takeover in which one company gains control over another against the will of its management (editor’s note). ↑

14. During the time of “War Communism” (1918-1921), at the height of the Civil War, from 1918 to 1923, the Trans-Siberian Railway was transferred by Leon Trotsky to the management of the U.S. Railway Mission of Stephen Stevens and its Russian-American Railway Corps, consisting of 350 American railway engineers. ↑

15. Source: Forbes: America’s Top 50 Companies 1917-2017, Jeff Kauflin, 19 Sep 2017. ↑

16. The Supreme Council of National Economy (VSNKh) was the supreme state institution for managing the economy of the RSFSR, and then the Soviet Union. At different times, there were two institutions with this name – in 1917-1932 and 1963-1965. ↑

17. A concession in this case is an agreed commercial contract between a foreign company and the Soviet regime, which provided for the design, construction and equipping of Soviet infrastructure, industrial, mining and agricultural facilities, the supply of products, equipment, services and/or materials. ↑

18. Montefiore, Simon Sebag, Stalin: The Court of the Red Tsar, (2004), New York, Knopf. ↑

19. The essence of Germany’s “September Program” is explained in Chapter 18 of the book. ↑

20. The non-recognition of Soviet Russia was informally reflected on December 4, 1917, in a memo from Secretary of State Robert Lansing to President Wilson, but was not officially announced until August 10, 1920, in a statement by Secretary of State Bainbridge Colby. ↑

21. William Boyce Thompson was succeeded by Raymond Robins when Thompson quickly left Russia after the Bolshevik Revolution. See Chapter 14 of the book for details. ↑

22. Cm. Chapter 14 of the book: The American Red Cross Mission in Russia 1917-1918 ↑

23. Affiliated with J. P. Morgan was a firm with a long commercial history, both in imperial and Soviet Russia, including the U.S. ambassador to Russia in 1903-1905, Robert S. McCormick of the McCormick family, who owned the International Harvester company. ↑

24. Eng. Gumberg. In the Russian transcription, there are variants: Gombarg, Gumbarg – approx. Red. ↑

25. The American company Perelstrous & Storm was founded on contracts to supply the Trans-Siberian Railway with tools and measuring instruments at the turn of the century, as well as to send thousands of Russian people from Siberia to work on Hawaiian sugar plantations. (J.K. Libbey, Alexander Gumberg and Soviet-American Relations, 1977). ↑

26. James W. Hulse, The Forming of the Communist International. (1964) Stanford, CA: Stanford University Press, p. 18. ↑

27. All three missions will be discussed in detail in the following chapters. ↑

28. Text of the “Plan of Russian-American Trade Relations” included in the record of Robins’ testimony at the 1919 Senate hearings on Bolshevik propaganda. ↑

29. In the original, it is erroneously Soretskoe (editor’s note). ↑

30. A more complete text of the “Plan” is given in Chapter 16 of the book. ↑

31. The “Giant” alone was the size of the state of Rhode Island. ↑

32. Bron, Saul G., ‘Soviet Economic Development and American Business’, (1930) Horace Liveright, New York., p. 50. (About $809.1 million in 2024 prices). ↑

33. Cm. Chapter 28: The Great Experiment in Industrial Agriculture, Soviet Collectivization, and American Agricultural Advisers. ↑

34. The New York Times, 4 August 1928.

    timesmachine.nytimes.com/timesmachine /1928/08/04/109858507.html?pageNumber=25 ↑

35. Harold Dorn, Hugh Lincoln Cooper and the First Détente, Technology and Culture, Vol. 20, No. 2 (Apr. 1979), Johns Hopkins University Press, pp. 322-347. ↑

36. Sutton, Anthony, Western Technology and Soviet Economic Development, 1917–1930. Stanford, CA, Hoover Institution (1968). ↑

37. timesmachine.nytimes.com/timesmachine/1928/08/04/109858507.html?pageNumber=25 ↑

38. Ibid. p. 4 ↑

39. This is equivalent to more than $613 trillion in 2024. ↑

40. Soviet Union Review, November 1928, Vol. VI, No. 11, “The New Concession Policy of the USSR,” Soviet Union Information Bureau of the Soviet Trade Delegation in Washington, D.C., pp.159-163. ↑

41. A. Sutton, Western Technology and Soviet Economic Development 1917-1930, (1968) p. 249. ↑

42. Ibid. p. 343. ↑

43. H.R. Knickerbocker, The Soviet Five-Year Plan and Its Effect on World Trade, (1931), p. 244. ↑

44. “The Soviet Government” Senator William Borah, Congressional Record—Senate, 73rd Congress, 3rd Session, 3 March 1931, p. 7039. ↑

45. “The Soviet Government” Senator William Borah, Congressional Record—Senate, 73rd Congress, 3rd Session, 3 March 1931, p. 7039. ↑

46. “Collectivization and Industrialization”. Library of Congress. Retrieved 17 April 2014. ↑

47. Knickerbocker, H.R., The Soviet Five-Year Plan and its Effect on World Trade, (1931) London. ↑

48. Sixty-four billion rubles. At the official exchange rate adopted in the USSR in the early 1930s, 1 dollar cost 1.95 rubles. However, according to a review of the Soviet Union Review published by the Soviet Trade Mission in the United States, in 1928 1 ruble was worth 51.5 cents and then declined to 50.5 cents in 1929, despite the free fall of the dollar in late 1929. ↑

49. Knickerbocker, H.R., The Soviet Five-Year Plan and its Effect on World Trade, (1931) London. ↑

50. “Foreign Trade Policy of the USSR”, Speech made by People’s Commissar for Foreign Trade Arkady Pavlovich Rozengoltz as reported in the Soviet Union Review, Vol. XI, No. 6, June 1933, pp. 123-127. ↑

51. Ropes, Ernest C., “The Shape of United States-Soviet Trade, Past and Future,” (Aug. 1944), The Slavonic and East European Review, Vol. 22. ↑

52. Soviet Union Review, Vol. V. No. 7-8, July 1927. ↑

53. The New York Times, Anna Louise Strong, “THE ANARCHIST WHO BUILDS AN EMPIRE; Bill Shatoff, Agitator in America, Is Driving a Railway Through a Desert to Make New Wealth for Russia.” 9 March 1930. ↑

54. “Shatoff Made Assistant Railroad Commissar,” Miscellaneous News, February 1932, Soviet Union Review, P. 45. ↑

55. Payne, Matthew, Stalin’s Railroad: Turk sib and the Building of Socialism, State Archive of the Russian Federation, University of Pittsburgh Press, (2001), p. 270. ↑

56. Payne, Matthew, (2001), p. 104. ↑

57. “U.S. Anarchist to Rail Magnate: A Russian Story,” Daily Tribune (Chicago, 12 March 1928), p. 15. ↑

58. A St. Louis businessman, former president of the St. Louis Grain Exchange, and one of the founders of the Mining and Stock Exchange, David R. Francis, was sent to Russia during World War I in 1916 as U.S. ambassador to renegotiate the canceled U.S. trade agreement with imperial Russia, since all Russian purchases of U.S. military supplies to the U.S. went through the London office of J.P. Morgan. bypassing many American firms. ↑

59. See Merchants of Death: A Study of the International Armament Industry, Helmuth Carol Engelbrecht, F. C. Hanighen, (1934). ↑

60. Once a country is diplomatically recognized, it can be offered loans financed by the U.S. government so that foreign purchases of products and services by the largest U.S. firms are financed by U.S. taxpayers rather than individual private firms.

    Since 1934, the U.S. Export-Import Bank (EXIM) has provided U.S. taxpayer funds for foreign purchases of U.S. capital goods and related services, guaranteeing or insuring loans to international buyers. EXIM is an independent agency of the executive branch and the official export credit agency of the United States. EXIM assumes credit and government risks that the private sector is unable or unwilling to take.

    “A report by the National Bureau of Economic Research’s Debbie Lucas of the Massachusetts Institute of Technology said that the long-term EXIM loan guarantee program actually provides guarantees [to foreign buyers] at a loss to taxpayers, not a profit. Moreover, this analysis shows that EXIM loan guarantees are provided on sufficiently generous terms that [foreign] borrowers receive subsidies of about 1% of the loan amount. That means taxpayers will have to pay $200 million for the $21 billion in loans the bank will make in 2012.” (Jason Delisle; Christopher Papagianis, 29 March 2012. “Critics of the Export–Import Bank Have a New Weapon at Their Disposal: Fair-Value Accounting”. – Economic Policies for the 21st Century. The Manhattan Institute). ↑

61. Soviet Union Review, Vol. V. No. 7-8, July 1927. ↑

62. Davies, Robert W.; Wheatcroft, Stephen G. (2010). The Industrialization of Soviet Russia Volume 5: The Years of Hunger. Palgrave Macmillan. p. 415. doi: 10.1057/ 9780230273979. ISBN 9780230238558. ↑

63. Rosefielde, Steven (Sep 1996). “Stalinism in Post-Communist Perspective: New Evidence on Killings, Forced Labour and Economic Growth in the 1930s”. Europe-Asia Studies. 48 (6): 959–987. doi:10.1080/09668139608412393. ↑

64. Wolowyna, Oleh (Oct 2020). “A Demographic Framework for the 1932–1934 Famine in the Soviet Union”. Journal of Genocide Research. 23 (4): 501–526. doi:10.1080/14623528.2020.1834741. S2CID 226316468. ↑

65. Cm. Chapter 28 of the book: The Great Experiment in Industrial Agriculture, Soviet Collectivization, and the U.S. Agricultural Advisers and Chapter 29 of the book: The 1933 Confession. ↑

66. H.R. Knickerbocker, The Soviet Five Year Plan and its Effects on World Trade, (1934). ↑

67. A non-convertible currency is the legal tender of any country that is not in free circulation in the global foreign exchange market. ↑

68. Krechetnikov, Artem (7 July 2016). Ruble: one name for 700 years and 21 more facts. BBC News Russian Service. Archived from the original on 10 July 2018. Retrieved 31 October 2018. ↑

69. Russian ruble facts. Archived from original 5 February 2022. Retrieved 5 February 2022. ↑

70. Pravilova, Ekaterina, The Ruble: A Political History (2023), Oxford Univ. Press, p. 21. ↑

71. Pravilova, Ekaterina, The Ruble: A Political History (2023), Oxford Univ. Press, p. 6. ↑

72. Ibid, p.11. ↑

73. In 1971, President Nixon instructed Secretary of the Treasury Connelly to suspend the conversion of the dollar into gold or other reserve assets so that foreign governments could no longer exchange dollars for gold. ↑

74. H.R. Knickerbocker, The Soviet Five Year Plan and its Effects on World Trade, (1934) p. 228-235. ↑

75. In effect, the Soviet regime turned the Russian ruble into paper money that was no longer convertible into silver or gold. Interestingly, in 1971, President Nixon introduced the paper U.S. dollar because there was no longer enough gold in the U.S. Treasury to cover the number of dollars in circulation. ↑

76. Knickerbocker (1934). ↑

77. International Monetary Fund Staff Papers: Volume 1, No. 2 , The Soviet Price System and the Ruble Exchange Rate, 1 Jan 1950, eISBN: 9781451971422, IMF eLibrary,

    https://www.elibrary.imf.org/view/journals/024/1950/002/article-A002-en.xml ↑

78. These figures show a marked decline in the relative value of the non-convertible Soviet ruble, which during the 1920s was stable at about 1 ruble = $1.51. ↑

79. Knickerbocker, H.R., The Soviet Five Year Plan and its Effect on World Trade, (1931) London, p. 225. ↑

80. Explained in Chapter 1 of the book. ↑

81. Cm. Chapter 29: Salimoff Co. v. Standard Oil Co. – U.S. Judges Uphold Nationalization of Soviet Oil – 1933 ↑

82. Gilbert, Charles, American Financing of World War 1, (1970), Westport, CT, Greenwood Publishing Corp. ↑

83. Fortune 100 is a list of the 100 largest companies in the United States (editor’s note). ↑

84. This refers to the State Trust for Construction Works in the Metal Industry “Metallostroy”, which is under the jurisdiction of the Supreme Council of the National Economy of the USSR (editor’s note). ↑

85. Alcan Hirsch, Industrialized Russia, (1934) p. 92 ↑

86. Sutton, A, Western Technology and Soviet Economic Development, 1917-1930, pp. 249 & 343. ↑

87. Ibid. p. 317. ↑

88. Libbey, James, K., Alexander Gumber & Soviet American Relations 1917-1933, (1977). ↑

89. As will be shown below, by 1918, the Webb-Pomeren Act had repealed much of the antitrust law, allowing U.S. firms involved in international trade to merge. ↑

90. Cm. Chapter 24 of the book: The Genoa Conference of 1922, Russia’s Oil Resources, the Formation of Limited Liability Companies, and the Soviet Decree on Property Rights. ↑

91. Brinton, Maurice (1970). The Bolsheviks and Workers’ Control: The State and Counter Revolution. London: Solidarity. ↑

92. Sutton, Anthony, Western Technology and Soviet Economic Development, 1930–1945. Stanford, Calif.: Hoover Institution (1971), p. 249. ↑

93. Alcan Hirsch, Industrialized Russia, (1934) p. 121. ↑