Notes on Global Forces Chapter 4- the Third Reich: 1934-1939

“The Soviet Union & the United States: 1917-1941” (Pages 68-92)

The Soviet Union

Pre-Revolutionary Russia The Romanov dynasty was unwilling to change with the times and the demands of the people; Russia was large and backward with only a small portion of its population involved in industry, most being peasants. Agricultural production could not keep pace with population growth, resulting in common food shortages. The defeat of Russia by Japan in the Russo-Japanese War (1905) had brought great unpopularity for the Romanov royal family Riots on “Bloody Sunday” January 22, 1905 resulted in a march on the Winter Palace and a number of workers being killed promoting even more labor unrest which was somewhat diminished when Tsar Nicholas II agreed to the formation of a representative Duma, allowing representatives of the people to gather and influence government policy. Foreign ownership of industry gave Russia a large national debt The economy was further devastated by World War I. The soldiers were ill-equipped and losses of men were extremely heavy. When Nicholas left to take control of the armed forces, he left his wife Alexandra in charge. She was strongly influenced by the mystic, Rasputin, who was eventually assassinated by a right-wing group determined to save the monarchy. Germany took advantage of Russia’s turmoil and encouraged independence movements in many parts of Russia- included support to Lenin. As the riots in St. Petersburg increased and the guards started to side with the demonstrators, the Tsarist officials went into hiding and the Romanov dynasty was overthrown when Nicholas II abdicated in March of 1917. A provisional government was established (first under Prince Lvov, and later under Alexander Kerensky). The provisional government saw competition between the Petrograd soviet and those who wanted to maintain Russian involvement in the war. This brought down the Lvov government in May. The Bolsheviks (Lenin and Trotsky) organized demonstrations in July 1917, but were put down resulting in Trotsky’s imprisonment and Lenin fleeing to Finland.

Russian Revolution The Second Coalition took office in July with Kerensky as prime minister. There was competition among factions on the left and right. General Kornilov, a conservative planned to have troops sent to Petrograd to destroy to destroy the soviet. Kerensky was successful in having Lvov arrested and Kornilov dismissed. The Bolsheviks were ready to take advantage of the split in the duma. Bolsheviks dominated the Petrograd and Moscow soviets and Lenin moved to take power. On October 25, 1917 (Nov. 7 on the new calendar), members of the provisional government were arrested and soviet authority was established. The Provisional Government had made many improvements: amnesty for political prisoners, abolishment of capital punishment, granted the right to strike, removed restrictions based on class, nationality, and religion; but despite these improvements, they had been unable to solve the issue of redistribution of land, and had become involved in a hopeless war (WWI). Lenin’s promise of “peace, land, and bread” was too popular during this time of crisis (remove Russia from the war, redistribute land to the people, and end the food shortages). These promises brought the popular support for the Bolsheviks to seize power in 1917.

War Communism (1917-21) “Peace, land, and bread” were much more difficult to attain than Lenin had imagined. Peace would prove to be very costly. The only way to get out of the war was by signing the Treaty of Brest-Litovsk with Germany in March of 1918. In return for ending the war for Russia, Lenin and Trotsky had to give the Germans territory that included 60 million people- Ukraine, Poland, Finland, Lithuania, Latvia, Estonia all received independence. 26% of Russia’s railway system, 33% of manufacturing industry, 73% of its iron industry, & 75% of her coal fields were lost in the settlement. (Despite these heavy losses, the treaty likely kept the Bolsheviks in power.) To provide the “land and bread” part of the promise, Lenin abolished all private property (nationalized it). Local soviets were instructed to establish collective farms. But the peasants weren’t about to give away their produce and they resisted by cutting back on production and selling their produce on the black market rather than giving it up to the government. Serious food shortages affected industrial labor and strikes resulted. “Between 1918 and 1920, 7.5 million people perished from starvation, disease, and the ravages of civil war. Nationalization and agricultural coercion had thrown the country into chaos.” (p. 74) Civil war continued; royalist supporters continued to try to take control back from the Bolsheviks. Foreign intervention made matters worse. The two sides of the civil war saw the Red Army (Bolsheviks under the command of Trotsky) against the White Army (a collection of monarchists, Kadets, Social Revolutionaries, and right-wing groups with little in common other than their opposition to the Reds). The Red Army was victorious in 1920 and in 1922 the Union of Soviet Socialist Republics (USSR) was born.

New Economic Policy The civil war and the policies of War Communism had devastated the Soviet economy and the Krondstadt naval base rebelled against Communist rule. The rebellion was put down, but Lenin realized that he had to do something and, in particular, to increase the production of consumer goods. In order to increase productivity, he introduced the New Economic Policy (NEP). This policy was actually a return to individual economic initiative and the profit motive. (This is a good point to use in favor of private enterprise in an essay!) This was to be a temporary measure (see p. 75 for details) and it revived the economy to its pre-war strength. But it was a threat to the whole concept of communism and couldn’t be allowed to continue.

Lenin’s Death and the Ensuing Power Struggle Lenin died in 1924, resulting in a power struggle within the Communist Party. There were 3 main ideological groupings within the party: the left-wing, led by Trotsky, who insisted that for the Revolution to be successful, that it had to be world-wide (he was against the NEP); on the right was Nikolai Bukharin, who also agreed on an international revolution, but not in a hurry (he favored the NEP as a stop-gap measure); and in the center was Josef Stalin, who did not favor world-wide revolution. Stalin felt that it was possible to achieve “socialism in one country” and that this would be a greater gain for the USSR and its people. With a combination of force, his control of the Party, and popular appeal, Stalin prevailed; he exiled Trotsky (and in 1940 had him murdered in Mexico).

Collectivization of Agriculture “The collectivization of agriculture was thought essential to the development of a socialist state. Economies of scale and mechanization would lead to increased yields that could feed the cities and release large numbers of workers for labor in industrial plants.” Agricultural productivity was necessary to the main goal of industrialization. Farm workers suffered much more than industrial workers. There were two types established under collectivization: state farms (run like a factory where the laborers were paid a wage) and collective farms (run more like a commune where the workers paid a tax but were rewarded for greater productivity with a share of the profits or surpluses. They were also allowed to have small private plots and some livestock. For collectivization to succeed, Stalin had to do something about the kulaks (wealthier farmers). They were forced out of Ukraine (the “bread basket” of the USSR) and about 5 million of them “disappeared”. Between 1929 and 1933 peasants resisted collectivization by slaughtering livestock rather than giving it to the state. Droughts between 1931 and 1932 made the shortages even worse. The famine that swept Ukraine claimed the lives of millions. “Systematic confiscation of grain by the Soviet regime led to a famine which resulted in as many as 6 million deaths.” (see p. 78 for more detail and a case study) The government persisted with its collectivization despite all this. By the third “Five Year Plan” 25 million farms had been collectivized. During this time period, 24 million people left the countryside, about half of them going to the cities to work. 12 million remain unaccounted for.

Industrialization In 1921 Gosplan (the state planning commission) was set up to provide an economic plan for the country. Its job was to create the Five Year Plans beginning in 1928. The Soviet Union had to become industrialized. The goals of the first Five Year Plan were staggering, with a focus on heavy industry (building factories and transportation systems). Most of the productivity was turned to the state and much was sold outside to raise capital for further investment. Many large projects were completed between 1928 &1941- dams large factories, steel plants, mines. Slave labor provided much of the labor force- political opponents were held in concentration camps and used to provide a slave labor workforce, with about 10% dying per year. But the results were astounding. By 1940, the USSR’s industrial output surpassed that of France, Japan, and Italy and perhaps even the United Kingdom. But agriculture was still a problem. The USSR was less able to feed its people in the late 30’s than it had been before WWI. The industry was relatively primitive and the produce of inferior quality.

Stalin’s Army Purge Between 1936 and 1938 Stalin ordered that the government and military be “purged” of dissenters. Stalin would not tolerate any opposition. Between 1934-34 a million “suspects” were removed from the party and others from the military (over 35000 officers were killed). (see p. 80 for more detail)

Soviet Foreign Policy There were 2 basic principles underlying Soviet foreign policy: a belief that the communist revolution would spread world-wide and second, that the capitalist nations were determined to destroy the socialist state; therefore, its borders and internal security had to be as strong as possible. In March of 1919, Lenin established the Communist International (Comintern) to further the goal of worldwide communist revolution. They spread propaganda, promoted labor strife, protest movements and subversion against capitalist regimes. April 1922 USSR signs the Treaty of Rapallo with Germany, providing for economic cooperation for USSR in exchange for Germany being able to conduct military manoeuvres on Soviet soil (in violation of the Treaty of Versailles). In 1933 Hitler ended military cooperation with the USSR and so the Soviets looked to the West for allies, especially France. Sept. 18/34 the Soviet Union joined the League of Nations. May 35 France and USSR signed an agreement of mutual assistance. Two weeks later the USSR signed a similar agreement with Czechoslovakia But the West was still very suspicious of Stalin, leading him to reopen ties with Germany. On Aug 23/39 they signed the Nazi-Soviet Pact (agreeing that each side would remain neutral in case of a war; a secret agreement provided for the partitioning of Poland between the two); It would also allow USSR to retake the Baltic States of Estonia, Latvia, and Lithuania. April 1941, the Soviet-Japanese neutrality pact was signed; Stalin encouraged Japan to expand southwards. June 22/41- after the Germans attacked USSR (Operation Barbarosa), Stalin joined the “Grand Alliance” with Britain and the United States.

The United States

See Case Study 11 of Ideologies (that we completed in Topic A for more detail on this topic).

Domestic Growth By 1900 the United States had become the greatest industrial nation of the world because of the following factors: rich and abundant agricultural land, vast mineral supplies, modern and efficient industrial technology, and ample capital for investment. Coal production and energy consumption expanded greatly. World War I helped the United States expand its economy even further. New York became a financial centre comparable to London. After the war, while the U.S. wanted to return to its isolationist policies politically and economically- they wanted to focus on domestic development They established protective tariffs (in 1922 with the Fordney-McCumber tariff and again in 1930 with the Hawley-Smoot tariff- these were partially to blame for the German’s plans to secure raw materials through annexation) The U.S. also imposed immigration restrictions in 1924 which seemed to favor some of the countries from north and Western Europe. The “Roaring Twenties” saw an economic boom characterized by a rapid rise in standard of living for regular citizens and a “mass consumer society” with many people using credit purchasing to get the many products available (automobiles, refrigerators, radio, movies). It also saw mass participation in the stock market with people making “leveraged” purchases of stocks (using borrowed money to buy stocks). The stock market had few controls in place and the result was the Stock Market Crash of 1929 (Black Tuesday- October 23/29), climaxing on Nov. 13/29. By 1933 the stock market hit its lowest point. “As many as 9 million savings accounts vanished as banks went out of business. More than 85 000 businesses went bankrupt and thousands of homes and farms were lost to mortgagers.” (p. 84). The GNP of the U.S. was cut in half by 1933, and 16 million people (1/3 of the labor force) were unemployed. This stock market crash began the “Great Depression”.

The Great Depression- this was an international occurrence, not just in the U.S. Causes of the Great Depression: Lack of any control (regulatory bodies) of economic relations and institutions The interrelatedness of global trade- over-borrowing on the part of nations like Germany and Austria; resulting inability to repay foreign debts A move toward trade protectionist policies further disrupted international trade In the U.S. exports shrunk markedly (wheat and other agricultural produce, cotton and this resulted in unemployment (lack of production = lack of employment opportunity) Uneven distribution of wealth in the U.S. resulting in a large portion of Americans unable to purchase the products that they themselves produced Lack of social programs to help the people Statistics of U.S. depression: 13 million unemployed, 1 out of 4 families on relief The Emergency Relief Act was passed in July 1932 by Hoover to assist cities in funding relief projects.

The New Deal See Case Study 11 of Ideologies Franklin D. Roosevelt was inaugurated to the office of presidency on March 3/33 His first measure was to declare a 4 day bank holiday to give his government time to deal with the banking instability. They passed the Emergency Banking Act which forbade the export of gold and the redemption of currency in gold (taking the U.S. off the gold standard, which all major countries of the time used as the means to determine the value of their currency). The Act also gave the government the power to create regulations that banks had to follow. When most of the banks reopened their doors for business, people had a new sense of confidence in them. (Money in banks is the basis for loans, credit, and in many ways, money flow. It’s important in the flow of money that stimulates investment in the economy.) What made the New Deal revolutionary was the massive government intervention in the marketplace. It was designed to remedy some of the abuses of capitalism by providing interim relief immediately and restructuring the system for the future. The “blueprint for recovery” was outlined in the “Hundred Days” form March 9-June 16, 1933. Major pieces of legislation included the following: Federal Deposit Insurance Corporation (insuring individual’s bank accounts against loss) Civilian Conservation Corps (employed 3 million young people on conservation projects) Federal Emergency Relief Administration (emergency relief for the needy) The Tennessee Valley Authority (TVA) which created work projects in the name of a series of dams for electricity and irrigation in the SE U.S. Home Owners’ Loan program (saved about 1 million homes) National Recovery Administration (regulated wages and prices in industry) These programs safeguarded bank deposits, relieved unemployment, provided emergency relief, extended credit, regulated competition, and ensured labor’s right to organize and bargain collectively (unions). The Social Security Act of 1935 introduced unemployment insurance and old-age pensions. The system of income tax was revised to re-distribute wealth (progressive taxation- rich pay more)

Foreign Policy After WWI, the United States returned to its former (pre-WWI) foreign policy known as isolationism. The American Congress felt that the U.S. had to focus on domestic affairs and that they didn’t want to be drawn into European affairs again. This, however, was not so simple. As we have learned, they were still involved heavily in an international economic scene. The U.S. did try, though, politically. They rejected the Treaty of Versailles (they made a separate peace with Germany in 1921) and did not join the League of Nations. Although the U.S. was not part of the reparations committee that assigned the $33 billion payment demanded by the Treaty of Versailles, they did become involved in it because unless Germany paid those reparations, the countries of Europe were less able to make payments on the war debts that they owed the U.S. as a result of loans made during the war. So in 1923, after Germany defaulted on their reparations payments, France occupied the Ruhr Valley to seize the mines and factories to get their money. The German economy was in chaos, with rampant hyper-inflation. The U.S., in 1924, launched the Dawes Plan which consisted of U.S. bankers lending money to stabilize the German economy and to scale down the reparations payments (as well as to encourage the French to withdraw from the Ruhr. Again in 1929, the U.S. created the Young Plan to once again reschedule and reduce the reparations payments. In 1931 President declared a one-year moratorium (“death”) on reparations payments. At Lausanne, in 1932, the European Powers agreed to reduce Germany’s reparations by 90% if the U.S. would forgive their owed war debts. (The next year Hitler came to power and stopped making payments at all.) The United States was also involved in international affairs in other ways. They hosted the 1921 Washington Naval Conference, freezing the number of capital ships for 10 years (good for them because it kept Japan at an inferior ratio of ships). The “Four Power Treaty” (U.S., Britain, Japan, and France) agreed to consult one another in the event of an international dispute over territorial possessions. In 1928 the United States formally recognized the government of Chiang Kai-shek in China (recognizing China’s territorial integrity and limiting Japanese expansion). In 1935 Congress blocked efforts to have the United States join the World Court. In that same year, Roosevelt once again introduced a Neutrality Act In 1937 the Neutrality Act was extended and the United States passed the first of the “cash and carry” bills that allowed them to trade with nations involved in war, but which required them to transport the American goods on their own ships. The outbreak of WWII challenged American neutrality. In November, 1939, Congress allowed the sale of war materiel to Britain and France. The United States taking the side of the democracies. In September, 1940, the U.S. formalized the “destroyers for bases” deal which exchanged American destroyers for a 99 year lease on British bases in the Caribbean. September 16, 1940, the Americans passed the Selective Training and Service Act (the first peace time draft or conscription in the United States). When Germany began air attacks on Britain, the United States transferred war materiel to Britain, the first transfer of goods under the Lend-Lease Act, which marked the end of American neutrality. With the Japanese attack on Pearl Harbor (Dec. 7/41) the U.S. declared war on Japan, and Japan’s allies, Germany and Italy, declared war on the United States.

See the summary on pages 89/90