Spies and Commissars: The Bolshevik Revolution and the West (54 page)

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.’
¹⁶
Such 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.
¹⁸
He 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;
²⁰
and Senator Harding was not pleased on reading in the press about the ex-prospector’s claim to be his business intimate.
²¹
Lenin 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.
²²
He 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.
²³
Theodore 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.
²⁴
The 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.

Vanderlip meanwhile performed like a snake-oil salesman: ‘I have joined the frontiers of Russia and America, making a broad band of republicanism around the world from Atlantic to Atlantic.’ He called on the US Congress to regularize trade relations without delay.
²⁵
Mining, timber-felling and fur-pelt production had made fortunes for entrepreneurs in Siberia before the Great War. The region’s general potential was famously under-exploited. Vanderlip continued his approaches to west-coast investors asking them to join his scheme and making it seem like a licence to print money; and soon he inveigled the Standard Oil Co. to purchase a quarter of his shares.
²⁶
The impetus towards a commercial treaty with Soviet Russia was gathering strength. On 4 January the
Manchester Guardian
reported that the US authorities were on the point of lifting their restrictions; its source was said to be ‘a Moscow wireless message’.
²⁷
The Soviet leadership was probably trying to bounce countries into restoring commercial links.
²⁸
Just as the Kremlin intended, the Republican Party in the US pricked up its ears. Senator Joseph I. France of Maryland led his colleagues in advocating official recognition of Soviet Russia. When the order was given to deport Ludwig Martens in early 1921, Senator France publicly protested and called for an end to the economic blockade.
²⁹
In his eyes simply no American interest was being served by ostracizing the Russian communist regime.

On 26 January his campaign bore fruit in the Senate when Henry Cabot Lodge convened the Committee on Foreign Relations to hold hearings on Russia.
³⁰
Senator France, as a prosperous man of affairs, spoke his mind; but the witnesses were chosen mainly from the American labour movement. This was deliberate. Lodge and France wanted to appear as if they had the interests of working men and women at the forefront of their minds – and they allowed plenty of time for them to argue that trade with Russia would boost industrial production and employment. The trade unionists spoke with admiration for Vanderlip’s Kamchatka initiative. They pointed out that a treaty would open the way for the US import of Russian raw materials and export of American manufactured goods. Senators asked briefly about the dictatorship established by the Bolsheviks, then dropped the matter. They were somewhat more persistent in questioning the labour movement’s representatives about their attitude to democracy in America. The unionists were ready for this and presented themselves first and foremost as US patriots. Yet this failed to convince several members of the Senate Committee. Under further
interrogation, some witnesses declined to repudiate the potential benefits of introducing Bolshevism to the American political scene, and Alexander L. Trachtenberg from the Socialist Party admitted to favouring the ‘nationalisation of property’.
³¹

This was not what Senators Lodge and France wanted to hear; they knew they would be thwarted in their objective of changing US foreign policy if the idea got around that labour movement leaders were crypto-communists. (They really should have done more research on Trachtenberg, who wanted his Socialist Party to become an affiliate of Comintern.)
³²
Lodge and his colleagues were happier when witnesses quoted H. G. Wells and his arguments for a trade treaty. They also liked it when John Spargo was cited as warning that America was falling behind Britain in looking after its economic interests;
³³
and under Republican leadership the Committee took the unusual step of including the entire report of the British Labour delegation to Russia in its published proceedings. The thinking behind this was obvious. The Labour delegation argued for the resumption of commercial links, and this was exactly what Lodge and Cabot sought for America.
³⁴
Fortunes could be made in Russia. America should not miss out on the lucrative opportunities.

The divergences among the Allied powers – or rather their governments – were getting wider. The French were resolute in their stand against dealing with Soviet Russia while Lenin refused to recognize obligations for the foreign loans incurred by Russian governments before October 1917. The Americans, through the Senate hearings, were only just beginning to consider whether to change policy. Even in the United Kingdom the situation was fluid. The British were still talking to Krasin, and no one outside the negotiations could yet tell whether they would produce a signed agreement. But the Western Alliance was practically at an end. Indeed Allied leaders took only one big decision jointly about Russia. This was reached on 24 January 1921 when the Allies granted their
de jure
recognition of Estonia and Latvia as independent states.
³⁵
The signal was being given that the Russian Whites were a lost cause. Until then the Allies had avoided contradicting the ambition of Kolchak, Denikin, Yudenich and Wrangel to reconstitute ‘Russia One and Indivisible’. They now accepted that at least two new Baltic states deserved official acceptance. As the remnants of Wrangel’s forces clambered on boats for Constantinople in November 1920, they left behind the
battlefields of defeat and looked to the future without solace. Their paymasters and advisers abandoned them.

The Bolshevik leadership and the Whites were in agreement on one thing: the desirability of gathering back the territories of the Russian Empire. The recent military defeat in Poland ruled out speedy action to the west of Russia, and the Kremlin set about assuring Estonia, Latvia and Lithuania that it had only peaceful intentions towards them. The south Caucasus was a different matter. Azerbaijan fell to the Red Army in April 1920, Armenia in December that year; like Ukraine, they were quickly turned into Soviet republics. For a while, the Georgians remained under Menshevik rule, but on 26 January 1921 the Party Central Committee decided to correct this anomaly with a plan to provoke a diplomatic breach with Georgia with a view to organizing an invasion.
³⁶

The same day, the Central Committee examined the latest reports from London. Lloyd George was proving amenable even though the legal status of Russian gold had still presented difficulties as recently as December.
³⁷
But although Krasin had done well with the Prime Minister, the judicial system was another matter. Mr Justice Roche in the same month found in favour of the Briton who had lost his timber in Sovnarkom’s nationalizing campaigns of two years earlier and was seeking to impound a Soviet cargo of veneer about to be unloaded in the United Kingdom. Roche’s judgment endangered any contract entered into by Krasin, and the
New York Times
warned that this could also have adverse consequences for any American businessmen tempted to trade with communist Russia.
³⁸
The oil of the south Caucasus was another contentious matter. Two British companies, the Baku Consolidated Oilfields and the gloriously named Spies Petroleum Co., had suffered the nationalization of their assets when the Red Army marched into Azerbaijan – some of their staff were thrown into prison. The companies raised a hue and cry when Krasin offered to make these assets available to other British enterprises.
³⁹
The disgruntled Leslie Urquhart also continued to make trouble for Soviet negotiators by denouncing the London talks in
The Times
.
⁴⁰

Even so, the Prime Minister was willing to keep the talks going. With a little more compromise on the Soviet side it might soon be possible to conclude a trade treaty. A small working party was created in Moscow to examine questions about Russia’s foreign debts in case Krasin needed to give some sort of commitment to recognizing
them.
⁴¹
Better to sign a half-good treaty than to lose the chance of any treaty at all. But when Lloyd George kept up the pressure on Krasin for the Bolsheviks to refrain from conducting their propaganda and subversion in the British Empire, Krasin affected outrage. If the government in Russia were to accept such a clause, he asked, what was to be done about Secretary for War Winston Churchill’s contributions to the Western press?
⁴²
Churchill doubtless caused annoyance to the Kremlin. But his commentary was never published in Moscow, and Krasin understood full well that Lloyd George simply wanted a reciprocal understanding that the British and the Russian authorities would not interfere in each other’s politics. Krasin could easily – if insincerely – give this guarantee. Almost without anyone expecting it, the muddled negotiations began to look as if they might end in a treaty.