10 January 1941 Nazi-Soviet Commercial and Border Agreement Signed

from wikipedia.org
“The Rise and Fall o Third Reich - William Shrier
The Wages of Destruction” - Adam Tootze
Hitler as a Military Commander - John Strawson

In October 1940, German officials estimated that their raw material supplies could comfortably last only though the summer of 1941. The situation was much more dire for rubber, the use for which in boots and tires was vital for any mobile army. Due to British Naval Blockade , German rubber stocks had fallen to only 1,500 tons. The secret protocols had also caused Hitler to be in the humiliating position of having to hurriedly evacuate ethnic German families, (the Volksdeutsche), who had lived in Finland and the Baltic countries for centuries, while officially condoning the invasions.

The Soviet annexations in Romania during September and October 1940 caused further strain. While Germany had given the Soviets Bessarabia in the secret protocols, it had not given them Bukovina. Germany wanted the 100,000 tons of grain for which they had previously contracted with Bessarabia, guarantees of German property safety, guarantees for 125,000 Volksdeutsche in Bessarabia and Bukovina, and reassurance that the train tracks carrying Romanian oil would be left alone.

While Hitler planned for war in the east, he wanted an additional economic deal to get what he could from the Soviet Union before the invasion, while other German officials wanted such a deal in the hopes that it could change the current anti-Soviet direction of German policy. Meanwhile, because of delivery difficulties and other issues, doubts began to arise about whether the German–Soviet Commercial Agreement.

Furthermore, talks became heated around the issue of the “Lithuanian Strip”. When the Soviets occupied the whole of Lithuania on June 15, this included the Strip, which had been promised to Germany in the “Secret Additional Protocols” in German–Soviet Boundary and Friendship Treaty signed in 1939 modifying the secret protocols of the Molotov–Ribbentrop Pact

Negotiations began in Moscow on October 30. German military economic negotiators had hoped for success in the negotiations, in part, because they felt this would strengthen their arguments against Hitler’s then increasingly anti-Soviet policy. The parties came closer to agreements on German 38-cm turrets, but the Soviets continued to resist demands for a full reimbursement of Volksdeutsche property. Instead of permitting full indemnification, the Soviets put restrictions on the wealth that the Volksdeutsche could take with them and limited the totals that the Soviets would apply to the Reich’s clearing accounts. In November, negotiations proceeded well for Germany on potential modifications for year two of the German-Soviet Commercial Agreement, with the Soviets first increasing their grain offer from 1.2 million tons to 1.5 million, and then up to Germany’s demand for 2.5 million tons. Negotiations regarding the “Lithuanian Strip” required Hitler’s direct intervention, so negotiations were briefly suspended on November 29 awaiting his actions.

The parties further negotiated over the percentage of nickel each would receive from a Finnish nickel mine at Petsamo and the amount that the Soviets would compensate Germany for their property claims in the Baltics, now occupied by the Soviet Union. Progress was made on the Volksdeutsche property front, with total compensation between 200 million and 350 million Reichsmarks, while the Soviets requested 50 million Reichsmarks for their property claims in German-occupied territories. They reached general agreement on German shipments of 10.5-cm flak cannons, gold, machinery and other items.

Hitler desired an arrangement because German planners were estimating that German food, oils and nonferrous metals would run out in 1941, and German rubber supplies could run out almost immediately, especially if Trans-Siberian or blockade-breaker shipments failed to arrive. German allies, such as Italy, were in even worse shape for key raw materials.

Knowing they were preparing for an invasion of the Soviet Union, German negotiators pushed to delay the delivery of German goods beyond the summer of 1941. Suspicious of German delays, in December, the Soviets demanded that all questions pending between the countries be resolved before an agreement could be made. Tensions had already built after Germany had ignored Stalin’s letter regarding Axis membership, with negotiators almost coming to blows at one point

On January 10, 1941, the German ambassador to Moscow Werner von Schulenburg and Commissar for Foreign Affairs Vyacheslav Molotov signed agreements in Moscow to settle all of the open disputes that the Soviets had demanded.

The agreement included relatively few substantially new economic elements. It extended trade regulation of the 1940 German–Soviet Commercial Agreement until August 1, 1942 and increased deliveries above the levels of year one of that agreement to 620 to 640 million Reichmarks. The agreement also finalized issues over transit costs for shipped goods, settled issues over the delivery schedules for goods shipped in year two of the German-Soviet Commercial Agreement, settled trading rights in the Baltics and Bessarabia and calculated the compensation for German property interests in the Baltic States now occupied by the Soviets.

Because of a stronger German negotiation position, German Foreign Ministry official Karl Schnurre concluded that, in economic terms, the agreement was “the greatest Germany ever concluded, going well beyond the previous year’s February agreement.” The agreement included Soviet commitments to 2.5 million tons of grain shipments and 1 million tons of oil shipments, as well as large amounts of nonferrous and precious metals. German Special Ambassador Karl Ritter, in a state of near-euphoria over Germany’s achievement, wrote a directive to all German embassies that “While Britain and the United States have up to now been unsuccessful in their efforts to come to an agreement with the Soviet Union in any field, the Soviet Union has concluded with Germany, the largest contract ever between two states.”

The agreement further covered the migration to Germany within two and a half months of [Volksdeutsche, ethnic Germans and German citizens in Soviet-held Baltic and Balkan territories, and the migration to the Soviet Union of ethnic Russians, Baltic and “White Russian” “nationals” in German-held territories. In many cases, the resulting population transfers of Volksdeutsche were to land previously held by ethnic Poles or others in Nazi-occupied territories.

The agreement also formally set the border between Germany and the Soviet Union between the Igorka river and the Baltic Sea.

Secret protocols in the new agreement stated that Germany would renounce its claims to the Lithuanian Strip in the “Secret Additional Protocols” of the German–Soviet Boundary and Friendship Treaty and that the territory would be regarded as within the Soviet sphere of influence, for which Germany would be paid 7.5 million dollars (31.5 million Reichsmark. Because of currency fluctuation issues, the parties used American dollar demarcations for compensation totals.

Actually Germany was already planning its invasion of the Soviet Union. On December 18, 1940, Hitler had signed War Directive No. 21 to the German high command for an operation now codenamed Operation Barbarossa stating: “The German Wehrmacht must be prepared to crush Soviet Russia in a quick campaign.” Hitler directed Raeder that Germany would have to take Polyanry and Murmansk at that time to cut off access to aid that would come to the Soviet Union.

During both the first period of the 1940 German–Soviet Commercial Agreement (February 11, 1940 to February 11, 1941) and the second (February 11, 1941 until the Pact was broken), Germany received massive quantities of raw materials, including over:

  • 1,600,000 tons of grains
  • 900,000 tons of oil
  • 200,000 tons of cotton
  • 140,000 tons of manganese
  • 200,000 tons of phosphates
  • 20,000 tons of chrome ore
  • 18,000 tons of rubber
  • 100,000 tons of soybeans
  • 500,000 tons of iron ores
  • 300,000 tons of scrap metal and pig iron
  • 2,000 kilograms of platinum

Large amounts of crude oil were delivered, with German documents in July 1940 already indicating that the Soviets had delivered crude oil at a rate of 150,000 tons a month for five months in 900 German tank cars exclusively reserved for it.

The trade pact helped Germany to surmount the British blockade of Germany. By June 1940, Soviet imports comprised over 50% of Germany’s total imports, and often exceed 70% of total German imports before Hitler broke the pact in June 1941.

On June 22, 1941, Germany began Operation Barbarossa, the invasion of the Soviet Union through the territories that the two countries had previously divided. Despite fears causing the Soviet Union to enter deals with Germany in 1939, that Germany came so close to destroying the Soviet Union was due largely to Soviet actions taken from 1939 to 1941.Without Soviet imports, German stocks would have run out in several key products by October 1941, within three and a half months. Germany would have already run through their stocks of rubber and grain before the first day of the invasion were it not for Soviet imports.

Large amounts of crude oil were delivered, with German documents in July 1940 already indicating that the Soviets had delivered crude oil at a rate of 150,000 tons a month for five months in 900 German tank cars exclusively reserved for it. Writer John Strawson (Hitler as a Military Commander) summary is : “Luftwaffe aircraft bombing London British cities in 1940-1941 were probably consuming oil imported from Russia”

Without Soviet deliveries of these four major items (oil , rubber , manganese , grain) , Germany could barely have attacked the Soviet Union, let alone come close to victory, even with more intense rationing.