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

Moreover, Stalin was worried by the weakness in depth of the Soviet system from economic damage and from ideological dissent. The war had been fought on an ideology of patriotism and nationalism, not as a Communist ideological struggle, and the Kremlin by 1946 was eager to get back to its Communist ideology, partly as justification of the new hardships of reconstruction under the fourth Five-Year Plan (March 13, 1946) and partly to overcome the Russian soldiers’ admiration for what they had seen of the West. These soldiers, for example, were amazed to discover that the “exploited” German workers of whom they had heard so much had standards of living several times higher than those of the ordinary Russian. The discovery that ordinary Germans had watches, even wristwatches, was an astounding revelation to the Russian soldiers, who proceeded to seize these wherever they saw them.

A third factor guiding Soviet behavior was the discovery that there was no mass support for Russia or for Communist ideology in eastern and central Europe, especially among the peasants, and that the buffer of Communist states along Russia’s western border would have to be built on force and not on consent. The governments of these states could be recruited from men of the respective nations who had been living in the Soviet Union for years under endless Communist indoctrination, but the unindoctrinated masses in each country would have to be held in bondage by Soviet military forces, at least until local Communist parties and local secret-police organizations subservient to Moscow’s orders could be built up. The urgent need for this, from the Kremlin’s point of view, was shown, when Austria and Hungary, although under Soviet military occupation, were permitted relatively free elections in November 1945. Both resulted in sharp defeats for the local Communist parties. Because such an outcome could not be permitted in the buffer satellites farther east, elections there had to be postponed until the local governments were sufficiently communized and entrenched to be able to guarantee a favorable outcome to any election.

It was this situation which made it impossible, in Russia’s view, to carry out the promises made at Yalta and elsewhere about free elections in Poland or other countries neighboring on Russia. The United States, through Secretary of State Byrnes, assured the Kremlin that it wanted these neighboring states to have “democratic” governments “friendly” to the Soviet Union. The Kremlin knew, although Byrnes apparently did not, that these were mutually exclusive terms. They insisted these governments must be “friendly,” while he insisted that they must be “free” and “democratic” in the Western sense. Since the Kremlin assumed that Byrnes knew as well as they did of the contradiction in terms here, they assumed that his insistence on “democratic” governments in eastern Europe indicated that he really wanted governments unfriendly to the Soviet Union. They were willing to call any governments which were friendly “free” and “democratic,” but Byrnes refused to accept this reversal of the ordinary American meaning of these words.

These disputes over Germany and eastern Europe, which were regarded in the West as Soviet violations of their earlier agreements at Yalta and Potsdam, were regarded in Moscow as evidence for Stalin’s conviction of the secret aggressive designs of the West. By the winter of 1945-1946, the Russian peoples were being warned of the dangers from the West. This began in 1945 with attacks on “cosmopolitanism” and prohibitions of Soviet soldiers “fraternizing” with aliens, especially soldiers of the United States or Britain, in the course of their occupation duties. Early in November 1945, Molotov warned the Moscow Soviet that Fascism and imperialist aggression were still loose in the world. Similar speeches were made by other Soviet leaders, including Stalin. By the spring of 1946, xenophobia, one of the oldest of Russian culture traits, was rampant again. In September 1946, and again in September 1947, Andrei Zhdanov, the Kremlin’s leader of the international Communist movement, made speeches which were simply declarations of ideological war on the West. They presented the Soviet Union as the last best hope of man, surrounded by prowling, capitalist beasts of prey seeking to destroy it.

On this basis the Soviet Union found it impossible to cooperate with the West or to accept the American economic assistance in reconstruction which was offered. The American Congress in the last renewal of the Lend-Lease Act in 1945 had forbidden use of these funds for postwar rehabilitation, but other funds were made available. For the transitional period these amounted to about $9 billion. These transitional funds were made available on a humanitarian and economic basis and not on political or ideological grounds. Accordingly, they were available to the Soviet Union and other areas under Communist control in accordance with the provisions of each fund. For example, the United Nations Relief and Rehabilitation Administration (UNRRA), was an international organization which handled goods worth $3,683 million, of which 65 percent was provided from the United States, 15 percent from Britain, and 3.5 percent from Canada. Its grants went to 17 countries with China first ($518 million), Poland next ($478 million), Italy with $418 million, Yugoslavia with $416 million, and the Ukraine, seventh, with $188 million.

Beyond the primary, humanitarian aim of most United States assistance was the desire to get local economies functioning, and efforts to further America’s basic conviction of the value of a high level of international trade on a multilateral basis. The United States was opposed to all restrictive trade measures such as autarchy, bilateralism, or quotas, and had as its ultimate aim the restoration of multilateral trade at the highest possible level, with freely convertible international monetary exchanges. It was convinced that such a system would be advantageous for all peoples, and did not see that it was anathema to the Soviet system, which had restrictions and quotas on economic life, even within the country, so that, while most Russians lived in poverty, a privileged minority, buying in special stores with special funds and special ration cards, had access to luxuries undreamed of by the ordinary person.

In the American plans for economic recovery, Great Britain, as the world’s greatest trader, had a special role. The United Kingdom could not exist without very large imports, but it could not pay for these without large exports. Such exports had to be much larger than before the war, even to pay for the prewar level of imports, because many of Britain’s prewar sources of overseas incomes from investments, shipping, insurance, and so on, had been drastically reduced by the war. In 1945 the British balance-of-payments deficit was about 875 million pounds sterling, and in 1946 it was still 344 million pounds. To tide over this deficit until British exports could recover, the United States in July 1946 provided Britain with a credit of $3,750 million, with interest at 2 percent and repayment in fifty annual installments to begin on December 31, 1951. The interest ‘was to be waived whenever the British trade balance would not pay for imports on her 1936-1938 level. In return for this, Britain gave rather indefinite promises to work to reduce its bilateralism in trade, especially imperial preference, and to release, as soon as feasible, its blocked sterling accounts.

Lend-Lease was ended in September 1945, with the Japanese surrender, and all claims were settled with Britain under an agreement of December 1945. This canceled the American grants under Lend-Lease of over $30,000 million and gave Britain permanent establishments on British soil, with supplies in Britain or en route, for a settlement of $650 million payable on the same terms as the British loan just mentioned.