Millionaires and Saboteurs
BY ALBERT E KAHN and MICHAELM SAYERS
CHAPTER XII from The Great Conspiracy: the secret war against soviet Russia
None of the incidents or dialogue in The Great Conspiracy has been invented by the authors. The material has been drawn from various documentary sources which are indicated in the text or listed in the Bibliographical Notes.
1. A Meeting in Paris
ONE afternoon, in the late fall of 1928, a few immensely wealthy Russian émigrés gathered with great secrecy in a private dining room at a restaurant on the Grand Boulevard in Paris. Every precaution had been taken to prevent outsiders from learning of the affair. The meeting had been called by the leaders of the Torgprom, the international cartel of former Czarist millionaires. The names of the men who were assembled had been legendary in old Russia: G. N. Nobel; N. C. Denisov; Vladimir Riabushinsky and other figures of equal renown.
These émigré millionaires had come together to confer surreptitiously with two distinguished visitors from Soviet Russia. Professor Leonid Ramzin, one of the visitors, was an outstanding Russian scientist, Director of the Moscow Thermo-Technical Institute, and a member of the Soviet Supreme Economic Council. The other visitor, Victor Laritchev, was Chairman of the Fuel Section of the State Planning Commission of the U.S.S.R.
Professor Ramzin and Victor Laritchev were supposedly in Paris on official Soviet business. The real purpose of their visit to the French capital, however, was to report to the Torgprom leaders on the activities of a secret espionage-sabotage organization they headed in the Soviet Union.
The organization headed by Ramzin and Laritchev was called the Industrial Party. Composed mainly of elements of the old Russian technical intelligentsia who had comprised a small privileged class under the Czar, the Industrial Party claimed approximately two thousand secret members. Most of them held important Soviet technical posts. Financed and directed by the Torgprom, these Industrial Party members were carrying on wrecking and spying activities in Soviet industry.
Professor Ramzin was the first to speak at the meeting in the Paris restaurant. He told his audience that everything possible was being done to interfere with the vast and ambitious Five Year Plan, which Stalin had just launched in an intensive effort to industrialize Soviet Russia's one sixth of the earth. Industrial Party members, said Ramzin, were active in all branches of Soviet industry and were putting into practice carefully systematized and scientific techniques of sabotage.
"One of our methods," the Professor explained to his listeners, "is the method of minimum standards, that is, the greatest retarding of the economic development of the country and the holding back of the pace of industrylization. Secondly, there is the method of creating a disproportion between the individual branches of national economy and also between individual sections of one and the same branch. And finally-, there is the method of `freezing capital,' that is, the investment of capital either in absolutely unnecessary construction or in that which might have been postponed, not being essential at the moment."
Professor Ramzin expressed particular gratification over the results that had been obtained by the "freezing capital" method. "This method has meant cutting down the rate of industrialization," he said. "Without doubt it has lowered the general level of the economic life of the country, thus creating discontent among large masses of the population."
On the other hand, Professor Ramzin pointed out, there had been less promising developments. A group of Industrial party members who had been carrying on work in the Shakhty Mines had recently been arrested by the OGPU. Several others who had been operating in the transport and oil industries had also been apprehended. Moreover, since Leon Trotsky had been sent into exile and his Trotskvite Opposition movement had been broken up, a great deal of the former inner political strife and dissension had died down, thus malting the operations of the Industrial Party that much more difficult.
"We need more support from you," Professor Ramzin said in conclusion. "But more than anything else we need armed intervention if the Bolsheviks are to be overthrown."
N. C. Denisov, the Chairman of the Torgprom, took the floor. A respectful hush fell over the small group as he began to speak. "As you know," Denisov said, "we have been conferring with Monsieur Poincare and also with Monsieur Briand. For some time Monsieur Poincare has expressed his complete sympathy with the idea of organizing armed intervention against the Union of Soviet Socialist Republics, and at one of our recent conferences with him, as you may recall, Monsieur Poincare stated that the question had already been turned over to the French General Staff to be worked out. It is now my privilege to convey to you additional information of the utmost importance."
Denisov paused dramatically, while his audience waited with tense expectancy.
"I bring you the news that the French General Staff has formed a special commission, headed by Colonel Joinville, to organize the attack against the Soviet Union!" (1)
Immediately there was a hubbub of excited comment. Everyone in the smoke-filled room began talking at once. It was several minutes before Denisov could continue with his report on the activities of the Torgprom. . . .
2. Plan of Attack
The date set for the military attack on the Soviet Union was the late summer of 1929 or, at the latest, the summer of 1930. The chief military- forces were to be provided by Poland, Rumania and Finland. The French General Staff would furnish military instructors and possibly the use of the French Air Force. Germany was to supply technicians and volunteer regiments. The British would lend their navy. The plan of attack was an adaptation of the Hoffmann Plan.
The first move was to be made by Rumania after the provocation of some frontier incident in Bessarabia. Then Poland was to come along with the Baltic border states. Wrangel's White Army, said to number 100,000 men, would move through Rumania to the southern army of intervention. The British fleet would support operations in the Black Sea and in the Gulf of Finland. A force of Krasnov's Cossacks, who had been quartered in the Balkans since 1921, would be landed on the Black Sea shore in the Novorossisk region; they would move on the Don, fomenting uprisings among the Don Cossacks and striking into the Ukraine. The purpose of this blow would be to cut off communications between the Donets coal fields and Moscow, thus effecting a crisis in the Soviet supply of metal and fuel. Moscow and Leningrad were to be simultaneously attacked, while the southern army was to move through the western districts of the Ukraine, with its flank on the right bank of the Dnieper.
All attacks were to be carried out without declaration of war, with startling suddenness. Under such pressure, it was thought, the Red Army would swiftly collapse and the downfall of the Soviet regime would be a matter of days.
At a conference arranged by the Torgprom leaders, Colonel Joinville, on behalf of the French General Staff, asked Professor Rainzin what possibilities there were of obtaining active military assistance from the opposition elements within the Soviet Union at the time of the attack from outside. Ramzin replied that the opposition elements, although scattered and underground since the expulsion of Leon Trotsky, were still sufficiently numerous to play a role.
Colonel Joinville recommended that the Industrial Party and its allies should establish a special "military branch." He gave Ramzin the name of several French secret agents in Moscow who could aid in the setting up of this sort of organization. . . .
From Paris, still ostensibly on official Soviet business, Professor Ramzin traveled to London to meet representatives of Sir Henri Deterding's Royal Dutch Shell and of Metro-Vickers, the giant British munitions trust dominated by the sinister Sir Basil Zarahoff who had once controlled large interests in Czarist Russia. The Russian professor was informed that, while France was playing the leading part in this plan for intervention against Soviet Russia, Britain was ready to do her share. The British interests Would give financial support, continue to exercise diplomatic pressure for the isolation of the Soviets, and lend the use of the British Navy at the time of the attack. . . .
Back in Moscow, Professor Ramzin reported to his associates in the conspiracy on the results of his trip abroad. It was agreed that the Industrial Party would devote itself to accomplishing two tasks: to bring about the most critical situation possible in industry and agriculture so as to arouse mass discontent and weaken the Soviet regime; and to develop an apparatus for giving direct aid to the attacking armies by means of acts of sabotage and terrorism behind the Soviet lines.
Money from the Torgprom, relayed by French agents in Moscow, poured in to finance the sabotage activities in various phases of industry. The Metal Industry was allotted 500,000 rubles; the Fuel, Oil and Peat Industry, 300,000 rubles; the Textile Industry, 200,000; the Electrical Industry, 100,000. Periodically, at the request of French, British or German agents, members of the Industrial Party and their allies prepared special espionage reports on Soviet aviation production, construction of air fields, developments in the munitions and chemical industries, and conditions on the railroads.
As the time of the invasion drew near, expectation ran high among the émigré Czarist millionaires. One of the Torgprom leaders, Vladimir Riabushinsky, published on July 7, 1930, an astonishing article entitled "A Necessary War" in the White Russian Paris newspaper, Vzoroshdenie.
" The coming struggle against the Third International, to seeure the liberation of Russia, will, beyond a doubt, be assigned by history to the group of most just and most serviceable of all wars," declared Riabushinsky. Earlier attempts at intervention in Russia, he added, had failed or had been abandoned on the grounds that they were too costly to carry out: "Back in 1920, and up to 1925, specialists were prepared to carry out this operation in the space of six months with an army of 1,000,000 men. The expenditure was calculated to run to 100,000,000 (British) pounds."
But now, said the émigré Czarist millionaire, the investment involved in smashing the Soviet regime would be considerably less because of the internal political and economic difficulties in Soviet Russia: -
Probably 500,000 men and three to four months would be sufficient to finish off this work in the rough. The final crushing of Communist bands would, of course, occupy a little more time, but that is rather in the nature of police work than of military operations.
Riabushinsky then proceeded to enumerate the many "business" benefits that would result from the invasion of Russia. A thriving Russian economy controlled by men like himself, he asserted, would result in "the annual influx into the European economic system of such wealth, in the form of a demand for various types of goods," that the result might well be "the wiping out of the five-million strong arms' of unemployed of Austria, Germany and Great Britain."
The anti-Soviet crusade was, of course, "a grand and sacred undertaking and the moral duty of humanity." But forgetting all of that, and looking at it from "the plain,. unvarnished, soulless and purely business point of view," Riabushinsky pointed out: -
. . . we can safely make the assertion that there is not an enterprise in the world which would he more justified from the business standpoint, or more profitable, than that of effecting the emancipation of Russia.
By spending one billion rubles mankind will receive a return of not less than five billions, i.e., five hundred per cent per annum, with the prospect of a further increase in the rate of profit every year by another hundred or two hundred per cent.
Where could you do better business?
3. A Glimpse Behind the Scenes
A glimpse into some of the fantastic anti-democratic and anti-Soviet plots that were being hatched in those years in the underworld of European big business and diplomacy was accidentally revealed in Germany in the late nineteen-twenties. . . .
German police detectives, in the course of a routine investigation in the city of Frankfort, had stumbled by chance on a mass of counterfeit Soviet banknotes (chervonetz) which were lying in a warehouse, packed in huge bundles and awaiting shipment to Soviet Russia.
The trial that ensued, known as the Chervonetz Trial, became an international sensation. Before the trial was over, the names of a number of the most prominent personages in Europe had been brought into the court proceedings. Among these personages were Sir Henri Deterding and his mysterious agent, Georg Bell; the Czarist oil magnate, Nobel; the Bavarian pro-Nazi industrialist, Willi Schmidt; and the celebrated General Max Hoffmann, who died shortly before the trial ended.
The defendants at the trial, charged with counterfeiting the Soviet banknotes, were Bell, Schmidt and two Georgian antiSoviet conspirators formerly associated with Noi Jordania: Karumidze and Sadathierashvili. As the trial progressed, it emerged that the aim of the defendants was to flood the Soviet Caucasus with the forged banknotes so as to create political tension and disorder in the Soviet Union.
"Economic factors," remarked the judge trying the case, "such a; oil wells and minerals, seem to play a dominant part in the scheme."
It soon became clear that the counterfeiting plot was only a small phase of a gigantic conspiracy. The pro-Nazi industrialist, Willi Schmidt, testified that he was primarily interested in "suppressing Communism in Germany," but he believed it would first be necessary to overthrow the Soviet regime in Russia. He admitted he had paid the expenses of General Hoffmann when the latter had gone to London in 1926 to submit to the British Foreign Office a copy of his Plan for a French-German-British alliance against Russia. Schmidt told the court that he had "the greatest confidence in General Hoffmann, both because of his personal character and because of his alleged association with big oil interests in England."
The Georgian conspirator, Karumidze, identified "the big oil interests" as those of Sir Henri Deterding, who was the chief financial backer of the plot.
Further testimony established that powerful financial and political groups in Germany, France and Britain had worked out an elaborate scheme to sever the Caucasus from the Soviet Union as a preliminary move in precipitating a general war against Russia. Syndicates had been formed for the "economic exploitation of the liberated territories." Germany was to supply troops, technicians and arms. The Anglo-French groups were to exert financial and diplomatic pressure on Rumania and Poland to ensure their participation in the crusade. . . .
A document "that might endanger the safety of the German state if it were made public" was read to the court in camera. It was said to involve the German High Command.
The trial was becoming dangerous. "Although the [German] Foreign Office and the British Embassy, declare that nothing will be kept from the public," reported the New York Times on November 23, 1927, "it is an open secret that the police have orders to hush up the whole affair."
The Chervonetz Trial came to an abrupt and extraordinary conclusion. The German court argued that since the banknotes had never been circulated, having been seized by the police before they were distributed, no forgery in the strict sense of the term had been committed. While "counterfeiting of Soviet currency was definitely proved," declared the court, the forgers and their associates "were, however, actuated by unselfish political motives and entitled to an acquittal." The accused conspirators left the courtroom as free men.
References to the. sensational case vanished from the newspapers after one public statement by Sir Henri Deterding: -
It is true that I knew General Hoffmann. I admired him as a soldier and leader of men. And unhappily now he is dead, and cannot defend himself. But I will defend him. . . . General Hoffmann was an implacable enemy of Bolshevism. He worked for years on a scheme to unite the great powers to fight the Russian menace. . . . That he was keen for a fight with Moscow is known to every student of post-war politics. It is a great shame that he is dead, for he would have had a complete answer to his traducers. . . .
The projected attack on the Soviet Union was postponed from 1929 to the summer of 1930. The reason given for the postponement in White Russian circles was "French unpreparedness"; but it was generally known that disagreements as to "spheres of influence in the liberated territories" had broken out between the various groups. The British and the French groups quarreled over control of the Caucasus and the Donets coal fields; both opposed German claims to the Ukraine. Nevertheless, Sir Henri Deterding, the real leader of the movement, remained optimistic that these differences could be resolved and confidently predicted the beginning of the war by the summer of 1930.
On June 15, 1930, replying to a letter he had received from a White Russian, who thanked him for money received, Deterding wrote: -
If you really desire to express your gratitude, I would ask you to do the following: Endeavor in the new Russia, which will rearise within a few months, to be one of the best sons of your fatherland.
The following month Sir Henri Deterding was the main speaker at a meeting celebrating the tenth anniversary of the founding of the Russian École Normale in Paris, a military academy for the sons of White Russian officers and aristocrats. The function was attended by Czarist émigré princes and princesses, bishops, generals, admirals and lesser officers. Side by side with them stood high-ranking members of the French Army, dressed in full parade uniform.
Deterding began his speech by telling those assembled that there was no need to thank him for the assistance he was giving their work, since he was only fulfilling his duty to Western civilization. Addressing himself to a group of young uniformed White Russians in the audience, he said: -
You must rely upon yourselves. You must remember that all your work and activities will take place on your native Russian soil. The hope of the early liberation of Russia - now suffering a national calamity - is growing and becoming stronger every day. The hour of emancipation of your great fatherland is at hand.
The entire audience, the French officers no less enthusiastically than the White Russians, applauded Sir Henri's next statement: -
The liberation of Russia will take place much sooner than we all think. It may even be the matter of a few months!
In the midst of these war preparations came an unexpected and catastrophic interruption: the World Crisis.
On December 18, 1930, Benito Mussolini summed up the effects of this unprecedented event on Europe: -
The situation in Italy was satisfactory until the fall of 1929, when the American market crash exploded suddenly like a bomb. For us poor European provincials it was a great surprise. We remained astonished, like the world at the announcement of the death of Napoleon. . . . Suddenly the beautiful scene collapsed and we had a series of bad days. Stocks lost thirty, forty and fifty per cent of their value. The crisis grew deeper. . . From that day we also were again pushed into the high seas, and from that day navigation has become extremely difficult for us.
Unemployment, hunger mass demoralization and destitution were the inevitable accompaniments of the economic crash which, beginning in Wall Street, soon - wept like a hurricane across Europe and Asia, involving all the nations which were to have composed the Holy Alliance against Bolshevism.
Great banks and. industrial concerns were crashing almost daily; Small investors were ruined; the workers were turned out in the streets. While the millions starved, wheat rotted in the crammed silos; surplus corn was plowed back into the earth, coffee was used for stoking furnaces; fish were thrown back into the sea. The world could no longer pay for the commodities it had produced in overabundance. An entire system of economic distribution had broken down.
Early in 1931, Montagu Norman, Governor of the Bank of England, wrote to M Moret Governor of the Banque de France: "Unless drastic measures are taken to save it, the capitalist system throughout the civilized world will be wrecked within a Year.
A world had tumbled in ruins and amidst the appalling wreckage, whole nations of baffled human beings wandered like lost souls. . . .
In the Far East, Japan saw her opportunity. The first phase of the Tanaka Memorial went into operation.
On the night of September 18, 1931, Japanese military forces invaded Manchuria. The Chinese Kuomintang armies, still fighting a civil war against the Chinese Communists, were taken by surprise and offered little resistance. Japan swept through Mancuria "to save China from Bolshevism." . . .
The Second World War had begun - not quite as it had been planned.
(1) This same Colonel Joinville had formerly commanded the French army of intervention in Siberia in 1918. At the time of the Torgprom meeting in Paris, the French General Staff included these members: Marshal Foch, who had advocated armed intervention against Russia ever since 1919; Marshal Petain whose anti-Soviet sentiments were equaled only by his fear of and contempt for democracy; General Weygand, who had led the Polish forces against the Red Army in 1920 and had remained ever since a tireless participant in anti-Soviet and anti-democratic plots. Foch died in 1929; his personal adjutant, René L'Hôpital, subsequently became President of the notorious Comite Franco-Allemand founded at the end of 1935 by the Nazi agent, Otto Abetz, to spread Nazi and anti-Soviet Propaganda in France.
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