Robert Service - Spies and Commissars

Lloyd George grew more truculent when news reached London of the Red Army’s defeat east of Warsaw. Kamenev accepted that he was no longer persona grata in the United Kingdom. Before he departed he sent an open letter to the Prime Minister claiming that the government was exploiting ‘paltry and unproved’ charges supplied to it by secret police agents; he also deplored the French government’s decision to recognize Wrangel rather than Lenin as the leader of Russia. Kamenev worried that the Allies might rediscover their enthusiasm for military intervention, but in fact Lloyd George was being crafty. Nobody in Whitehall really thought Kamenev was worse behaved than Krasin, yet Krasin was allowed to keep his New Bond Street office and continue the trade talks. 11The truth was that the Prime Minister still desired some kind of commercial treaty with Soviet Russia. By making a fog of the situation he alleviated the criticism in the press. Lacking the military or political means to eliminate Bolshevism, he was doing what he thought was the next best thing by undermining the Soviet order through a resumption of commercial contacts. Lloyd George saw himself as the mole-catcher who would grub out communism.

Like the other Liberals in his governing coalition, he wanted to avoid giving any impression that ministers were out to provoke an armed clash with Soviet Russia. He also needed to show himself as a friend of the British working man, which would be difficult if he threatened a so-called proletarian government elsewhere in Europe. He was also straining to promote Britain’s economic recovery from the post-war recession. Industrialists who had done good business in Russia before 1914 were lobbying him for a resumption of trade with the Russians. National economic self-interest was put forward in justification, and Lloyd George acted with confidence that more people would eventually support him than were writing to The Times to denounce him.

Krasin still goaded the British by mentioning the progress being made by the rest of his negotiating team elsewhere in Europe. Among the experts on banking and railways he had left behind in Stockholm was Professor Yuri Lomonosov, once a monarchist but now a supporter of the October Revolution. Lomonosov was involved in Sovnarkom’s offer to sell its gold reserves in exchange for locomotives, carriages and rail track, and industrial companies in Sweden competed for the contracts being dangled in front of them. 12Originally the Soviet intention had been to make such purchases in Germany, but this was scuppered when the Allied powers reaffirmed their ban on deals involving Russian gold of disputed ownership. The Germans, having lost the war, had to comply with what the Allies demanded. Sweden, which had been neutral in the Great War and was therefore unaffected by the Paris peace treaties, was the next best option for the Bolsheviks. An agreement was drafted and, with Krasin’s consent, a provisional deal for one thousand locomotives was signed on 22 October 1920. Gold was already in place in Tallinn to complete the agreement. Sovnarkom was delighted at this latest breach in the wall of Russia’s economic isolation. It was consequently odd that it should be Krasin who raised an objection. He belatedly expressed the fear that the Allies would compel Sweden to withhold any railway exports under the terms of the contract. He thought there was a risk of depleting Russian gold reserves for the benefit of Swedish business partners but not for Sovnarkom. 13

There was another snag, and it was a big one. Swedish industry lacked the capacity to manufacture so much railway equipment with any rapidity. The Stockholm deal would depend on Sweden’s metallurgical companies quietly buying around eight hundred locomotives from Germany. 14Business of this surreptitious nature had gone on between Russia and Germany throughout the Great War when German entrepreneurs established ‘Swedish’ electrical companies to trade with Russian firms in products essential to Russia’s military effort. Another wartime dodge had been for German enterprises to stick Scandinavian markings on goods made in Germany. So the Johann Faber works, which had sold pencils in the Russian Empire for decades, simply rebranded its output with Danish insignia; and German razors found their way into Russia emblazoned with the motto: ‘To a Brave Russian Soldier for Distinguished Service’. 15

The ratification of the Swedish contract was scheduled for 18 December, and Krasin had yet to be convinced. The Stockholm members of his negotiating team went to London to plead with him. Krasin was not overly receptive. His talks with the British had never been easy and the Swedish initiative might cause complications. On balance, he thought, a firm, open treaty with Britain was preferable to a dubious set of arrangements in Sweden. He was not being unnecessarily difficult; he bore a huge responsibility. Soviet Russia was economically shattered, and the Politburo would judge his efforts unkindly if he allowed unprofitable deals to be brokered. He was known as pragmatic but on this occasion he spoke to his team like the most ruthless Bolshevik, saying that they should be shot for the deal they were recommending. One of them replied: ‘It’s fortunate, Leonid Borisovich [Krasin], that you’ve been saying this to me in London rather than in Moscow. Right now, just listen to me. There will always be time to shoot us later.’ 16Such was the grim humour of communist dictatorship, volunteered by a non-communist seeking to demonstrate his honesty and loyalty. After three hours of discussion Krasin finally gave his approval, admitting that his team had done a good job in Stockholm. 17

Worries about the Allied reaction had never deterred Lenin and Trotsky; and as the outstanding figures in the Soviet communist leadership, they felt freer to follow their instincts in negotiating with foreigners. Lenin met his first businessmen from abroad in summer 1920 when a certain Washington B. Vanderlip arrived from America. Vanderlip pretended to be a scion of the exceedingly wealthy Frank D. Vanderlip and his business dynasty and also suggested that he could speak on behalf of Senator Warren G. Harding of Ohio who, as the Presidential candidate for the Republican Party, was in favour of resuming trade with Russia. Although Vanderlip had nothing like the wealth or connections he claimed, he knew a bit about Russia since he had prospected for gold in Siberia at the turn of the century. 18He also had the gift of the gab, and Lenin fell for his blandishments to such a degree that the Soviet authorities signed a provisional deal for him and his backers to take up a vast mining concession in Kamchatka in the Soviet Far East. In November 1920 he fetched up in Stockholm, where he boasted that his company had leased 400,000 square miles in Siberia for sixty years. Vanderlip claimed that he was helping the Soviet government to purchase American goods to the value of $3,000,000,000 which would be paid for with Russian gold and other natural resources. 19

The New York Times immediately warned against Vanderlip’s personal credentials and about the dangers and morality of dealing with the communist government; 20and Senator Harding was not pleased on reading in the press about the ex-prospector’s claim to be his business intimate. 21Lenin incompetently increased American concerns by stating in public that he had granted the Kamchatka concession deliberately so as to play off America and Japan against each other. 22He naively assumed that no Westerner would read the Russian communist press. He was equally stupid in September when telling H. G. Wells that the Vanderlip deal was the first step towards a US–Russian defensive alliance against Japanese aggression in Siberia. Lenin said that he looked forward to allowing the Americans to build a naval station on the Soviet Pacific coast and signing long-term economic concessions with American companies. 23Theodore Rothstein, who was doing the interpreting, failed to stop him from blurting out these ideas and pleaded with Wells to keep quiet about what he had heard: ‘He is wonderful. But it was an indiscretion…’ Wells gave his word of honour, only to break it in his book Russia in the Shadows : the conversation proved too juicy for him to discard. 24The world received a lesson that the Soviet rulers could be wily in protecting their interests. Evidently, too, the artful Lenin could be a bungler when his tongue ran away with him.