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

First of all, mindful perhaps of the fate of many of their fellows in the great purges of the late 1930s, many Soviet functionaries showed a remarkable unwillingness to commit to any proposal or suggestion for fear that they might be treading on their superiors’ toes. As Germany’s negotiator in Moscow, Gustav Hilger, noted in his postwar memoir, “The negotiations were marked by the chronic suspicion of the Soviet negotiators and by the fear of responsibility even on the part of a Politburo member like Mikoyan; this in part explains the fact that it took four months of active discussions to come to terms.” Lacking a political lead, Soviet negotiators often preferred—whether subconsciously or by design—to allow talks to drift into discussions of minutiae or unreasonable demands and to await direction from the Kremlin.

That direction was usually forthcoming. As one German official noted, the “extremely difficult” negotiations repeatedly required the “personal intervention of Stalin to prevent a premature collapse.” Ribbentrop had appealed to Stalin to break the deadlock in the talks for the February 1940 agreement, and Soviet officials did the same to smooth their negotiations. General Yakovlev, for instance, dismayed by the amount of bureaucracy involved in any purchases earmarked by the Soviet delegation to Germany, was relieved to be able to cut through the red tape by cabling Stalin in the Kremlin, who promptly acceded to his request and ordered that no further difficulties were to be made.

For his part, Stalin certainly did not intervene out of altruism. Rather, he very definitely used the economic negotiations as a political tool, a lever with which to exert pressure on his German partner, smoothing matters when he wanted to appear conciliatory, ignoring matters when he did not. For many on the German side, this wider political link to the negotiations was patently obvious. Joseph Goebbels gave an example in the summer of 1940. At a time when German-Soviet relations were increasingly strained by the Soviet annexation of the Baltic states, Bessarabia, and Northern Bukovina, deliveries from Moscow suddenly began to flow, briefly meeting their quotas. As Goebbels noted in his diary, the connection was clear: “The Russians are providing us with more than we want,” he wrote. “Stalin is making an effort to please us.”

Believing that he held the stronger hand in the economic relationship with Germany, Stalin was also not shy about seeking to exploit that position in any way he could. His primary weapon in this regard was to demand artificially high prices for Soviet deliveries, while insisting on bargain-basement prices for German products. Soviet negotiators refused to accept the industry standard “Gulf price” for their oil, for example, insisting instead on a premium of at least 50 percent, which their German counterparts were obliged to accept. At the same time, the price for German deliveries of coal in the other direction was driven so low that Moscow was able to resell much of it at a healthy profit.

Another example is that of manganese, vital for the creation of steel alloys, which was one of the few commodities that Germany had already sourced from the USSR prior to the war. However, whereas Germany had paid 2.9 million RM for 60,000 tons of Soviet manganese in 1938, by 1940 the price for 65,000 tons had risen by 75 percent to 5.5 million RM. For communists, Stalin’s negotiators clearly demonstrated a sound understanding of the fundamental workings of capitalism.

In extreme cases, Stalin was not above resorting to more radical methods to get his point across. In September 1940, for instance, Mikoyan expressed his growing frustration at what he saw as German delays in deliveries and a generally unhelpful attitude from the Reich’s negotiators. Stalin reacted by simply halting the oil supply, in the expectation that such a move would swiftly cause his German partners to see sense. No new shipments followed for the next two weeks, and Soviet supplies for the month dropped to under half what they had been for August.

In his intransigence, Stalin arguably overplayed his hand. For, although he had been Hitler’s only viable option in the autumn of 1939, by the summer of 1940 Germany’s strategic situation had vastly improved, and a number of alternative suitors—occupied France, Romania, Sweden—could supply the Greater German Reich. In light of that strategic shift, Berlin’s perception of the relationship with the Soviet Union began to change as well, and Hitler’s economic advisors increasingly began to envisage a European economic area, with Germany at its heart, rather than an increasingly turbulent and unpredictable economic partnership with Moscow. Paradoxically, therefore, the more Stalin intervened, the less influence he would have.

Their capitalist flourishes and heavy-handed responses aside, the Soviets also had a few grievances of their own. For one thing, Stalin appears to have been particularly disquieted by the staggered aspect of the Commercial Agreement—by which Soviet deliveries were balanced by later German counterdeliveries—and worried that the Germans were behind schedule. Indeed, Soviet complaints were constantly aired about supposed German foot-dragging. Valentin Berezhkov recalled one such conversation with Gustav Krupp von Bohlen in Essen early in 1940. After complaining about the slow progress of the assembly of the Lützow ’s guns and accusing Krupp of “violating the schedule” for delivery, he was told that “there are forces beyond our control.” Blaming the war and Anglo-French intransigence, Krupp claimed that he was doing his “patriotic duty” in supplying the Wehrmacht first of all but promised to look into the Soviet complaints and pledged to finish work on the Lützow as soon as the Prinz Eugen had been completed. This approach was certainly in line with the official instruction from Berlin that Soviet orders were to be given priority after those of the German military, but it is quite possible that it still gave ample scope for procrastination.

The Germans, too, could raise complaints regarding the progress of the Lützow , but on a quite different issue. As Nikita Khrushchev related in his postwar memoir, a German rear admiral, Otto Feige, was dispatched to Leningrad with the vessel to oversee the job of fitting her out. However, Feige soon attracted the attention of the Soviet intelligence service and a “honey trap” was prepared for him, involving a “young lovely,” an “indecent pose,” and some photographic equipment. Despite the ensuing scandal, Khrushchev claimed, the Soviet secret police failed to recruit Feige, as the brazen rear admiral “couldn’t have cared less.” Hitler, meanwhile, was said to have been most indignant and “raised a rumpus” with the NKVD chief, Lavrenti Beria.

While ideology would undoubtedly have added a certain spice to such confrontations, it was not the primary irritant. There were, in many cases, genuine economic or strategic reasons for either or both sides to feel aggrieved. In the Baltic states, for example, German companies had an estimated 200 million RM of investment in 1940, as well as a similar value in export trade in foodstuffs and fuel. However, with the Soviet annexations of that summer, those contacts were effectively severed and the markets and assets lost. Of course, when Berlin had negotiated the Baltic states away in the autumn of 1939, it had done so in the expectation that access to Soviet markets and resources would easily counterbalance such losses, but the reality was that it rarely did.

Berlin was similarly disquieted by developments in Moscow’s two newly annexed Romanian provinces, where its existing trade contracts, predominantly for lumber and foodstuffs, were promptly downgraded. Although Molotov had promised to respect German economic interests in the region, he informed Berlin after the annexation that the agreed-on grain export to Germany from Bessarabia for 1940 would be reduced by two-thirds. In such instances, Germany got the worst of both worlds: losing stable, reliable trading partners and having to deal solely with Moscow, which was proving an increasingly difficult and demanding client.