Stalin moves deftly to crush any revolt. He is ruthless in his manner, coy and cunning firm as steel. “Unless we immediately start to improve the situation in Ukraine,” he wrote, “we might lose Ukraine. Mind you, that Pilsudski is not sleeping, and his agents in Ukraine are many times stronger than Redens or Koisor might think. Also keep in mind that the ranks of the Ukrainian Communist Party (500,000 members, ha-ha) have quite a few (yes, quite a few!) rotten elements, conscious and unconscious followers of Petliura*, and finally, direct agents of Pilsudski. As soon as matters take a turn for the worse, these elements will rush to open the front inside (and outside) of the party, against the party. The worst thing is that the Ukrainian leadership is blind to these dangers. This can no longer continue.” (Stalin to Kaganovich, August 11, 1932, re. “If we don’t make an effort now to improve the situation in Ukraine we may lose Ukraine.” , O.V. Khlevnyuk et al., eds., Stalin i Kaganovich. Perepiska. 1931-1936, Moscow, 2001, 273-75, in Michael Ellman, “The Role of Leadership Perceptions and of Intent in the Soviet Famine of 1931-1934”, Europe-Asia Studies, v. 57, Sept. 6, 2005, 823-41; “The situation was worsened in Stalin’s view by the way the Ukrainisation policy had been applied, which had strengthened the anti-Soviet elements in both Ukraine and Russia (e.g. the North Caucasus; Stalin i Kaganovich. Neizdannaia perepiska. 1931-1936, Moscow: ROSSPEN, 2001, 274; Ukrainian nationalist Simon Vasilyevich Petlyura Ukrainian headed anti-Bolshevik forces in Ukraine 1919-19, assassinated in Paris exile 1942)
Elsewhere and preoccupied with his Russian banking business for his Consortium masters, Bullitt learns that the National City man has invited for the Russian Soviet State Bank to join in the talks “because I believed them to be favorable to an early settlement with the National City Bank”. Further, he adds, “I repeated my old argument of impossibility as to the credit plan, and made a new summing up of the arguments previously advanced in support of the 1927 plan for the so-called “Public Debt”. He figured that of the $50 million some $35 million “was deposited with the Committee in New York, and of the twenty-five million, some fifteen million was deposited.”
Baryshikoff had already been given all the details in New York. Soviet annual gold production “remained relatively low, only slightly upwards of thirty-five million dollars”. But National City rejects a credit plan of 50 to 100 million dollars, as well as “an arrangement for an association of American manufacturers who would carry their own credit risk, but American banks to finance the manufacturer”. Thus the Consortium planners with the eyes always keen to the exigences and inevitability of an outbreak of war, here or there (does it really matter where?), have worked out a viable banking scheme for Stalin and are prepared to force it through as long as Japanese encroachment in Manchuria makes him the weaker partner in the untold story of the National City Bank role in FDR’s deal to recognize the USSR. (W. C. Bullitt Papers, Yale Univ. Archives)
Stimson’s curiosity is aroused. He yearns to know how it would all unravel that fatal summer of 1932.
Documents of private bank debts, steps and procedures of details pertaining to US government recognition of Stalin’s Soviet Communist Dictatorship are stacked or filed orderly during secret talks with Soviet leaders under the shadow intensified extermination and continuous depopulations of starving villages. Special rail cars normally designated to transport cattle are assigned; caravans of armed trucks create streams of prisoners to the gulags dispersed throughout Russia, in the Urals and Eastern Siberia.
As the Kremlin transports more grain exports for sale on the world market, Bill Bullitt jaunts about Europe for National City on a bid to bring Stalin closer to the table as a legitimate partner for the Consortium. But there is another problem in all this diplomatic maneuvering. Wherever Bullitt went he would be recognized by journalists eager for a scoop Stimson would never send Bullitt; he detested him. Before FDR’s nomination it would not be in House’s cards. Especially with the recognition card was back on the table a public scandal over the Morgan-Rockefeller money in bed with the communists would be devastating for either political party. How did the Consortium keep a lid on it before the spectacle of diplomacy was exposed as a shambles? And Stalin, too, is desperately worried that news of the Holodomor will spill out into the western press. In a letter to Kaganovich written in June the Soviet leader frets that “several tens of thousands of Ukrainian collective farmers are still traveling all over the European part of the USSR and demoralizing the collective farms for us with their complaints and whining.” (Yuriy Shapoval, “Foreign Diplomats on the Holodomor in Ukraine”, Holodomor Studies; Stalin i Kaganovich. Neizdannaia perepiska. 1931 to 1936, Moscow: ROSSPEN, 2001, 179)
Small world for expats in Russia these days. During his trek through Moscow and the Ukraine that summer Gareth Jones makes sure he meets Spencer Williams of ARCC. In the ARCC shuffle, in 1930, Spencer Williams is hired replacing Smith. Many like Duranty, Chamberlin, and Lyons prefer Smith known for his tight links to the Bols. “I had a talk with Spencer Williams,” Jones wrote, “of the American-Russian Chamber of Commerce here (sic). He is a rather mild man, and it is a tough job he has these days.”
Jones makes some notes: “The Five-Year Plan is only a slogan not necessarily a schedule which must be fulfilled”; “Stalin’s new policy is merely a temporary phase”; “There is little private trade left in the country now; and next year there will not be any!”; “Diesel engines are being turned out in quantity, but quality is lacking. Two or three boats on the Black Sea have proceeded at too fast a tempo, and, also, there is a general tendency for managers to be easy in making inspections”; “Labour has too high a turnover and is nomadic. Food and housing rumors fly about to the effect that better conditions exist elsewhere, so workers move off”; “A decline or rise in the exports of the USSR will depend very much on the world crisis”; “Last year was the test year for agriculture. The Russians succeeded. This year is the test year in industry. Most of the orders for machinery are now going to England.” Jones hears their side of the story, and writes, “A worker tells Jones, ‘Only when we are dead will conditions be better. They are much worse now than before the Revolution. The peasants are very angry. We only get salt fish, but in the Kremlin they get everything’.” Williams stays on as ARCC’s PR man in Moscow until the end of the decade.
Years later after Hitler invades Poland and Stalin’s Red Army gets driven back by the Finns Spencer Williams disappeared from Moscow and resurfaced reporting in Time from London (March 1940) that the Consortium ARCC’s trade agent “at last could talk freely—even of famine.” Time thought it useful to tell readers that ARCC had shut down the Moscow office “until further notice.” Luce’s magazine adds, “Almost every U. S. business bigwig who has been to Moscow knows slender, dry, efficient Spencer Williams. Most of them have rushed to him at one time or another for help in dealing with Bolshevik mountains of red tape. Interviewed in London by reporters and Columbia Broadcasting System last week. Spencer Williams said: ‘A general rise of 35% in all food prices was decreed about the middle of January.’ That’s a story no newspaper correspondent was allowed to send… ‘There’s still bread in Russia and as long as there is bread there is no famine. My experience in Russia goes back to periods of relative plenty and virtual famine, and in my opinion the food supply when I left Moscow was worse than at any time since the famine of 1933. Most of the people standing in these queues are women – housewives or servants or older members of a family. But it’s always been remarked in Russia that the ‘women say what the men think.’ And during the periods this winter when the temperature fell at times to 45° below zero, women in the queues were heard to say ‘We’ve had enough of this: we’ll not go through this again ‘Such remarks I never heard in Russia, even during the days of the 1933 famine.’ The pro-Soviet trade lobbyist then said what the Russians know is that ‘the Soviet leaders of today are ‘doped by their own propaganda’ and the Kremlin ‘has brought the level of intelligence of all Russia down to its own… The Kremlin actually was surprised and deeply resentful of the fact that the Finns shot at them… The Slav intellect can’t understand anyone fighting for such an abstract thing as freedom ’.” (Time, March 18, 1940)