Roger Moorhouse - The Devils' Alliance - Hitler's Pact with Stalin, 1939-1941

This proved something of a crisis for Nazi Germany, not least because the much vaunted supplies from the USSR, which it had hoped would circumvent the British blockade, were scarcely materializing. Indeed, according to American journalist William Shirer, the Germans were already adopting some peculiar measures to reassure the public, falsely labeling supplies of butter and flour from Slovakia and Bohemia as “Made in Russia” to demonstrate the supposed benefits of the Soviet relationship.

Meanwhile, behind the public relations facade, German urgency—if not desperation—was increasing. Hitler had been making preparations for the campaign in the West against Britain and France since November 1939, and yet he was still receiving only a trickle of the vital supplies he had expected from the Soviet Union. In oil, for example, Germany required 60,000 tons per month from the USSR just to maintain its own stocks, but it was so far receiving only a fraction of that figure. Similarly, German grain supplies were increasingly perilous, with a 1.6 million ton shortfall expected for 1940, even under optimal conditions and assuming a full quota of Soviet deliveries. Far from oiling the wheels of Hitler’s war machine, it seems, Soviet supplies were proving a serious hindrance.

Given the looming crisis, the big guns were brought into play: Hitler stressed to his acolytes the necessity of accommodation with the Soviets, while Ribbentrop endeavored to bring Stalin into the talks, writing to him directly in early February 1940 to request that the USSR fulfill the promise “given during the September negotiations that the Soviet government was willing to support Germany during the war.” Remarkably, the appeal worked; Stalin vowed to take Ribbentrop’s views “into consideration,” and within days negotiators in Moscow were finalizing details of a new German-Soviet Commercial Agreement. The USSR now agreed to supply 650 million RM of raw materials over the following eighteen months, two-thirds of it within the first year, in return for Germany supplying the same value of military and industrial hardware over the following twenty-seven months to May 1942, with two-thirds of that total falling due within the first eighteen months. The figures involved were certainly considerable. Combined with the earlier Credit Agreement of August 1939, the new Commercial Agreement tied the economies of Nazi Germany and the USSR closely together, committing each to around 800 million RM of business in the first two years.

The reception, on both sides, was suitably positive. The Soviet press—which had reacted coolly to the original August 1939 agreement—was enthused, praising the February 1940 deal as being of “great economic and political significance” and providing “for the future development of cooperation between the USSR and Germany.” Stalin gave his own assessment in the final phase of talks, stating, “The Soviet Union sees this not merely as a normal treaty for the exchange of goods, but rather as one of mutual assistance.” The Nazi press concurred, hailing the new agreement as “more than a battle won, it is quite simply the decisive victory” in combating the British blockade. German negotiators were no less effusive. Karl Schnurre minuted to the Foreign Office in Berlin that the revised agreement represented “the first great step towards the economic programme envisaged by both sides.” Gustav Hilger, meanwhile, recalled in his postwar memoir that the Commercial Agreement signified “a door to the East opened wide, and British efforts at an economic blockade of Germany considerably weakened.”

The various lists of commodities and products appended to the Commercial Agreement are highly instructive and appear to confirm Hilger’s assessment. The Soviet Union, for instance, committed to supply 1 million tons of feed grains, 900,000 tons of petroleum, 800,000 tons of scrap and pig iron, 500,000 tons of phosphates, and 500,000 tons of iron ore. In addition, lesser amounts were stipulated of platinum, chromium ore, asbestos, sulfur, iridium, iodine, glycerin, albumin, tar, lime, and numerous other products.

In return, the items to be supplied by the Germans were set out in four separate lists. The first of these—concerning military equipment—ran to forty-two typewritten pages, encompassing everything from submarine periscopes and hydrographic instruments to complete tanks and aircraft, including five Messerschmitt Bf-109E fighters, five Messerschmitt Bf-110C fighter-bombers, two Junkers Ju-88 bombers, two Dornier Do-215 light bombers, five half-tracks, two Fa-226 helicopters, and one “fully equipped” Panzer III. Most surprisingly, perhaps, the Soviets also ordered ten single-seat Heinkel He-100 aircraft—more than any other single model—evidently convinced by the spurious claims of their German counterparts that it really was superior to the Bf-109. In addition, they demanded numerous engines and spare parts, including 1,500 spark plugs, 10,000 piston rings, 30 propellers, and myriad other items, including chemical warfare equipment, artillery pieces, armored vehicles, gun sights, optical instruments, and various types of bombs and ammunition.

Other items to be provided by Germany covered sundry military and industrial supplies, including equipment for the mining, chemical, and petroleum industries, turbines, forges, presses, cranes, and machine tools. Beyond that, the Soviets wanted 146 excavators, as well as locomotives, generators, diesel engines, steel tubing, and a number of ships, including a 12,000-ton tanker, which was to be delivered “promptly.” A final list outlined those items in which the Soviets expressed “an interest” for possible future purchases, “depending on conditions,” including plants for coal hydrogenation, vulcanization, and synthetic rubber production. In essence, the Soviets were demanding from Germany nothing less than the shortcut to an advanced military-industrial economy.

One of the first items on the Soviet “shopping list” was the heavy cruiser now referred to by the Germans as the “ex-Lützow.” As with many other categories, the negotiations that led to the sale of the Lützow had been rather tortuous. The Soviets had first requested the ship in early November 1939, along with the similarly unfinished Seydlitz . Then, at the end of that month, the stakes had been raised further when another Admiral Hipper –class cruiser, the Prinz Eugen , as well as the plans for the battleship Bismarck , were added to the list of Soviet demands. Unsurprisingly, the matter was passed on to Hitler, who vetoed the sale of the Seydlitz and the Prinz Eugen and agreed to the sale of the Bismarck plans only on condition that they would not be permitted to fall into the “wrong” (i.e. British) hands. With a green light for the sale of the Lützow , the two sides could begin haggling over price. The Soviets dismissed out of hand an initial suggestion from Göring of 152 million RM, nearly twice what construction had cost. But by February 1940 the sale of the vessel was included within the Commercial Agreement, despite the fact that no price had yet been arranged, suggesting that both sides considered the deal as good as done. According to the wording of the agreement, the now ex- Lützow was “to be delivered for completion in the USSR” including her “hull and all equipment, armament [and] spare parts,” as well as “complete plans, specifications, working drawings and trial results.”

Thereafter, negotiations on price dragged on until early May 1940, at which point a renewed German proposal of 109 million RM for the cruiser and ammunition was immediately met with a Soviet counteroffer of 90 million RM. Just as Germany’s forces were invading France and the Low Countries that month, it seems her negotiators tired of haggling and agreed to split the difference, fixing a price of 100 million RM for the ship, despite the fact that the German side considered that figure “not acceptable from a strictly commercial point of view.” With that, the ex -Lützow duly left Bremen under tow from oceangoing salvage tugs, to arrive in Leningrad at the end of May.