Carroll Quigley - Tragedy and Hope - A History of the World in Our Time

The Nazi-Soviet Trade Agreement of August 19, 1939, promised that Germany would provide 200 million marks’ credit to be used for machinery and industrial installations for Russia in return for Russian raw materials to the value of 180 million marks. On February 11, 1940, a new agreement increased these exchanges to 750 million marks’ value and provided that Russian deliveries should be made in 18 months and be paid for by German deliveries covering 27 months, the accounts to be balanced in this 2:3 ratio at six-month intervals. At the same time, Russia promised to facilitate transshipment of goods to Germany from Iran, Afghanistan, and the Far East, across Siberia.

This Trans-Siberian leak in the blockade of Germany could have been of great significance because it allowed Germany to keep contact with allied Japan and provided a route to the tin, rubber, and oil of the Netherlands Indies and southeast Asia. However, transportation difficulties, lack of full cooperation by the Russians and Japanese, as well as payment problems, kept the 1940 total for Trans-Siberian freightage to Germany down to about 166,000 tons, of which 58,000 were soybeans and 45,000 were whale oil. In the five months of 1941, before the outbreak of war in Russia, this transit of goods to Germany reached 212,000 tons with soybeans and whale oil accounting for 142,000 tons of the total. Such essential items as rubber, tin, copper, wool, or lubricating oils amounted to only a small fraction of the total.

Germany did much better in obtaining goods from the Soviet Union itself, for the total on this score reached 4,541,202 tons over the 22 months from September 1, 1939 to June 22, 1941. The largest items in this figure were 1,594,530 tons of grain, 777,691 tons of wood and timber, 641,604 tons of petroleum products, 165,157 tons of manganese ore, and 139,460 tons of cotton, but, once again, there were relatively small amounts of vital defense materials which Germany urgently needed. On the other hand, the items Germany did obtain were very profitable to it because Germany was far behind on its repayments to Russia, a situation which became worse as June 1941 approached. The materials Germany had promised in payment were industrial products of great value to the Soviet defense, and Germany delayed in its shipments as much as possible because of Hitler’s plans to attack eastward. The Soviet demands that the Germans should catch up on their arrears of payment became one of the irritants which hastened the Nazi attack on Russia in 1941.

On the whole, the blockade had no decisive effect on Germany’s ability to wage war until 1945. After examining the evidence on this problem, the chiefs of the blockade of the Foreign Economic Administration in Washington wrote, “Germany’s war production and military operations were never seriously hampered by a shortage of any essential raw materials or industrial products, with the single exception of petroleum—and even that shortage resulted from the combined effect of the Soviet Army’s capture of Romanian oil fields and the concentrated bombing of Germany’s synthetic production rather than directly from economic warfare.” The same writers point out that Germany’s food supply, in calories per capita, was at the prewar level until the very last months of the war.

The ability of the Germans to cope with the blockade was largely due to their high level of engineering skill and their ruthless exploitation of conquered Europe, especially of the manpower of dominated areas. German engineering ability made it possible to get around material shortages or to repair industrial plants damaged by air raids, but these efforts required more and more manpower, which Germany lacked. An increase in the labor supply was obtained by enslaving the captured peoples of Poland, Czechoslovakia, Russia, and other countries. In the same way, the German food supply was kept up by starving these enslaved peoples.

In the early part of the war, the blockade was not effective because of the low level of German mobilization, the slow and faulty fashion in which the blockade was (perhaps necessarily) applied, the large number of neutral and nonbelligerent countries, the leaks to Germany across Soviet Russia and Vichy France, the ineffectiveness of quantitative controls under a limited naval patrol, and the succession of German conquests which brought such valuable assets as the Norwegian iron-ore route, the French iron mines and aluminum industry, the Romanian oil wells, or the Yugoslav copper mines under direct German control.

THE SOVIET BORDERLANDS, SEPTEMBER 1939-APRIL 1940

During the “phony war” from September 1939 to April 1940, there were persons in Britain, France, and Germany who were willing to fight to the bitter end and other persons who were eager to make peace. Such persons engaged in extensive intrigues and cross-intrigues in order to negotiate peace or to prevent it. One of the most publicized of these efforts gave rise to the so-called “Venlo incident” of November 1939. On October 9th Hitler ordered his commanding generals to prepare for an immediate attack on the Low Countries and France. Shortly afterward, two members of British military Intelligence in the Netherlands, who were officially attached to the British diplomatic mission at The Hague, were approached by a man whom they believed to be an agent of discontented generals of the German General Staff. This man, who may have been a “double agent” working for both sides, wished to discuss the possibility of negotiating peace if the German generals removed Hitler and his chief associates by a coup d’état . The proposal sounded authentic because the British leaders had been approached with similar offers, which were known to be authentic, since August 1938, and there was,

at that very moment, late in 1939, a member of the German General Staff who was passing information (including the date of Hitler’s projected attack on Holland) to the Netherlands military attaché in Berlin.

With Lord Halifax’s permission, the two British officers, Major Richard Henry Stevens and Captain Sigismund Payne-Best, with an observer from the Netherlands government, Lieutenant Klop, held five meetings on Dutch territory with the German negotiators. At the fifth meeting, at Venlo on November 9th, the negotiators, who were really members of the Security Police of the S.S., shot Lieutenant Klop, and escaped into Germany with his body, the two British agents, a Dutch chauffeur, and the automobile in which they had been traveling. The incident aroused great notoriety at the time and, in some circles, was taken to indicate that Britain was really eager to find some way out of the conflict, in spite of its proclaimed determination to fight to a finish.

The Venlo incident was but one, and on the whole a rather unimportant one, of a number of unsuccessful efforts to make peace between the Western Powers and Germany in the six months following the defeat of Poland. These efforts combined with the lack of fighting in the “phony war” to convince the leaders of the Soviet Union that the Western Powers had little heart in fighting Germany and would prefer to be fighting Russia. As we shall see, this was probably true of Chamberlain and his close associates and of Daladier and his successor as prime minister of France, Paul Reynaud. To avoid or at least postpone an attack, from either the Western Powers or Germany, became the chief aim of Soviet policy, and every effort was made to strengthen Russia’s military, strategic, and political position. It was felt in the Kremlin, in the period from September to May, that the danger of attack was greater from the Western Powers than it was from Germany, since Germany was in such great need of Russian raw materials that it would probably keep the peace if the Soviet Union made serious efforts to fulfill the economic agreements it had signed with Germany. Moreover, the political agreements of August 23rd and September 28th, by giving the Soviet Union a free hand east of a specified line, made it possible for Russia to strengthen its defenses against Germany by advancing its frontiers and military bases up to that line. Furthermore, the Soviet leaders believed that full economic cooperation with Germany might persuade Hitler to bring pressure on Japan to reduce its pressure on the Soviet Far Eastern frontier.