Wall Street and the Russian Revolution: 1905-1925

by Richard B Spence

Overview

Wall Street and the Russian Revolution will give readers critical insight into what might be called the "Secret History of the 20th century." The Russian Revolution, like the war in which it was born, represents the real beginning of the modern world. The book will look not just at the sweep of events, but probe the economic, ideological and personal motivations of the key figures involved, revealing heretofore unknown or misunderstood connections. Was Trotsky, for instance, a political genius, an unprincipled egomaniac, or something of each? Readers should come away with not only a far deeper understanding of what happened in Russia a century ago, but also what happened in America and how that still shapes the relations of the two
countries today.

Product Details

ISBN-13:	9781634241243
Publisher:	Trine Day
Publication date:	06/07/2017
Sold by:	Barnes & Noble
Format:	eBook
Pages:	288
File size:	4 MB

About the Author

Dr. Richard B. Spence is a professor of history at the University of Idaho where he has taught since 1986. His interests include modern Russian, military, espionage and occult history. He is the author of numerous book and articles.

Read an Excerpt

Wall Street and the Russian Revolution 1905-1925

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By Richard B. Spence

Trine Day LLC

Copyright © 2017 Richard B. Spence
All rights reserved.
ISBN: 978-1-63424-124-3

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CHAPTER 1

Two Empires

The Empire of the Tsar

In his famous 1835 work, Democracy in America, Alexis de Tocqueville observed that "There are ... two great nations in the world which seem to tend toward the same end, although they started from different points: I allude to the Russians and the Americans." "Their starting-point is different, and their courses are not the same," he added, "yet each of them seems to be marked out by the will of Heaven to sway the destinies of half the globe." Thus, America and Russia represented parallel, and inevitably rival, Manifest Destinies. Historically, that has proven to be absolutely true.

The always-quotable Winston Churchill famously described Russia as "a riddle, wrapped in a mystery, inside and enigma." The reality is more a set of paradoxes. In 1900, the Russian Empire was the largest country on Earth. Only the far-flung British Empire could claim more territory. Like the British Empire, Russia ruled over a bewildering array of nationalities, languages and religions. Russians, per se, made up less than half the population. Eleven percent was Muslim of one stripe or another and 5% Jews. Millions of Poles, Finns, Latvians and others lived under the rule of the Romanov Dynasty, some contentedly, others despairingly. Russia was counted among the Great Powers and boasted the largest army on earth. Nevertheless, in 1904-05 it was unable to defeat small, upstart Japan.

Inside Russia's immense expanse, nearly three times the area of the continental U.S., was a vast treasure house of natural wealth. By merit of these resources, the Tsar's domain should have been among the most prosperous anywhere. It was blessed with abundant human resources. In the twenty years between 1897 and 1917 its population burgeoned to almost 180 million, nearly twice that of the United States. Some 85% of those people, however, were crammed into the 20% of the Empire that constituted European Russia. Instead of general prosperity there was pervasive poverty. Three quarters of the population eked a living from the soil. Poverty and frustration bred discontent.

It was not surprising that many inside and outside Russia regarded it as a "backward" country and this image was magnified by its political system. Until 1906, the Russian Empire was an autocracy, the Tsar its sole source of authority. There was no constitution, no parliament, and no political parties – at least no legal ones. When the Revolution of 1905 created a constitutional order with an elected Duma (parliament), the Tsar still retained the absolute power to dismiss it and veto its laws.

Thus, it followed to many that the cause of the country's backwardness was the Tsarist system itself. It equally followed that the overthrow of this antiquated regime would not only free Russia from tyranny, but also open the vast country to efficient development. What was good for the masses would be good for business, including foreign business. This attitude especially resonated with the American reformist mindset which had coalesced around abolitionism in the early 19 century and became the driving force behind prohibition and Progressivism in the early 20. American Progressives tended to see every social problem as a moral crusade, a crusade that could justify violence, revolution, even war. From this perspective, Tsarism was not just backward, but evil. The American Progressive link to the Russian Revolution would be most clearly embodied in the Society of the Friends of Russian Freedom (SFRF), which will feature prominently in the coming discussion.

The central conceit of the Russian revolutionaries and their foreign supporters was that the Tsar's rule was irredeemably tyrannical and cruel. The reality, of course, was not quite so black and white. Between 1876 and 1905, the Russian justice system executed some 500 persons. Per capita, this was less than half of those put to death in Britain and, more significantly, a mere fraction of the 2,700 judicially killed in the United States from 1880-1905, and America's population was only 60% of Russia's. Put another way, the US executed nine citizens to every one put to death in Russia. No aspect of the Russian penal apparatus aroused more indignation than the Siberian exile system which was widely held up as the "embodiment of brutality." It was an American, journalist George Kennan, who popularized this view in his 1891 Siberia and the Exile System. The book portrayed Russia as an "amalgamation of villainy, frozen wastes and hound packs."

Again, the reality was rather different. During 1904-13, years of rebellion and mass repression, almost 30,000 persons were dispatched to Siberia for political offenses, but only 14% received the harshest punishment (prison labor). By 1913, amnesties left a mere 1051 political prisoners in custody. Adjusted for population, the American and Russian prison systems held roughly the same proportion of inmates in 1910. On an index of human misery and degradation, it is doubtful that much distinction could be drawn between a Siberian labor camp and a Louisiana chain-gang. The point here isn't that the Tsar's regime was some shining beacon of tolerance and mercy. It could be arbitrary, oppressive and cruel. But in that regard it was not drastically different from any other government of the day.

"Backward" Russia began to industrialize in the 1890s under the guidance of Imperial Minister of Finance, Sergius Witte. Witte believed that the expansion of Russia's transportation system would open the country's vast resources and facilitate the migration of millions to the virgin lands of Siberia. Witte achieved considerable success: prior to 1904 Russia's economic growth has been estimated at an astounding 8% per annum, and after the chaos of 1905, it rebounded to 6-7% before the next war arrived. Between 1880 and 1913, Russia's "Industrial Potential" tripled. By the latter year its share of world manufacturing output exceeded 8% and it had overtaken France in that and in steel production and was 60% of Britain's levels in both. Russia could also boast being the world's second biggest producer of oil (after the U. S.). Russian productivity was still only about a quarter of America's, but it was a dynamic economy seemingly on the cusp of a great break-out.

Of course, a Russia that realized its full economic potential would constitute a major competitor to every other industrial power, including the U.S.A. Russia was the only country that had the resources to displace America as the world's dominant economy. From the standpoint of Wall Street, it was a potential rival that needed to be co-opted, controlled, or eliminated.

The Russian Revolutionaries

The first effort to overthrow the Tsarist regime was the so-called Decembrist Revolt of 1825. Disgruntled elite intelligentsia, inspired by the ideas of the French Revolution, coalesced into two societies, a moderate one that envisioned a constitutional monarchy and a more radical clique that advocated the abolition of the Monarchy and its replacement with a collectivist republic. In late 1825, these elitist rebels tried to incite mutiny against the new Tsar Nicholas I. It was a complete fiasco.

In the decades following, scattered political cells kept the spirit of dissent alive. Many of those who fell afoul of the authorities, or simply could not abide the repressive atmosphere, sought freedom abroad. Thus began the phenomenon of the Russian radical émigré, men, and women who would spend their lives plotting revolution in places like Paris, Geneva and New York.

A new revolutionary wave began in the 1870s, a direct result of the liberalizing reforms of Tsar Alexander II. In addition to freeing the serfs, the "Tsar Liberator" permitted several thousand young, overwhelmingly upper class, Russians to seek education abroad. Exposed to radical ideas, many returned home, determined to change the system. The result was the so-called Narodnik (Populist) movement in which hundreds of starry-eyed activists tried to "raise the consciousness" of the newly-liberated peasants. Their efforts, too, failed. Frustrated by the reactionary mindset of the peasantry, some would-be saviors turned to terrorism and the conviction that they, as an enlightened vanguard, had to make the revolution for the masses. Again, the movement split into factions, some more radical than others. The most militant element, Narodnaya Volya ("Peoples' Will") focused on assassinating Tsar Alexander. They succeeded in March 1881. Contrary to their hopes, the Tsarist regime did not collapse.

Around the turn of the century there was a fresh surge of revolutionary activity. Out of this arose the Party of Socialist Revolutionaries, better known as the SRs, which appeared in 1901. Like the earlier Narodniks, the SRs saw themselves as the liberators of the peasantry. They also embraced terrorism and embarked on a campaign of political assassination. The SRs could claim to be the largest revolutionary faction, boasting 50,000 full members by 1907 with another 300,000 supposedly under "party influence." What the SRs never produced was a unified ideology or a charismatic leader.

The SRs' chief competition came from the Social Democrats, or SDs, who sprang into being in 1898. The SDs were Marxists, which meant that their brand of socialism fixated on the industrial working class, or proletariat. However, while early 20 century Russia had well over 100 million peasants, it had at only 2-3 million factory workers. This sparked doctrinal debates that came to a head at the 1903 Party Congress in London. The result was two rival factions, Mensheviks and Bolsheviks. The former, taking its cue from Socialist parties in the West, advocated a mass workers' party and held that before Russia could embark on a Socialist course, it first had to pass through a bourgeois revolution. For anyone itching to see a communist utopia, this was a frustrating proposition. In contrast, the Bolsheviks, under Vladimir Lenin's dictatorial thrall, advocated a small "vanguard" party dedicated to seizing power and instituting a "dictatorship of the proletariat" at the first opportunity. Nor were Bolsheviks and Mensheviks the only factions; there were separate Latvians and Jewish Bundists. Membership fluctuated; in 1906, Bolshevik strength was less than 15,000, but by the 1907 Congress, the total number of SDs had risen to 150,000, of which Lenin's crew counted for about a quarter. However, hard-core revolutionists of all stripes probably numbered no more than 300,000 in 1907. Even 500,000 would represent but a tiny fraction of Russia's adult population. Adding "sympathizers" would expand this number significantly, but it's hard to make a case that the Russian revolutionary movement was truly a mass one or even a popular one.

Even more important than numbers was money. Revolutions don't come cheap, and the movement could never have enough. One means to generate funds was ekspropriatsiya ("expropriation"), or, more simply, robbery. The Bolsheviks showed a special affection for this. On 26 February 1906, a gang of Bolsheviks and Latvian SDs held up the Helsinki State Bank and got away with 170,000 Rubles (@ $85,000). The biggest and bloodiest expropriation, however, was the Tiflis (Tblisi) heist on 26 June 1907 in which Bolshevik gunmen got away with 341,000 Rubles. The robbery was notable for its carnage, forty killed and fifty injured, and the involvement of one Yosif Djugashvili, a.k.a., Stalin. Lenin's financial wizard, Leonid Krasin, was involved in planning the operation and fencing the stolen cash. We will hear much more of him.

Robberies, of course, were hit and miss. More important to revolutionary finances were the contributions of wealthy sympathizers. A key benefactor of the SRs was the Paris chief of the Russian Wissotzky (Vysotsky) Tea Company, Mikhail Tsetlin. Wissotzky was the official supplier of the Tsar's household and, thus, the same company that supplied morning tea toNicholas and Alexandra funded revolutionaries seeking to kill them. The Bolsheviks found a sugar-daddy in textile tycoon Savva Morozov, at least until he shot himself – or was murdered – on the French Riviera in May 1905. Morozov conveniently left a large insurance policy payable to the left-wing writer Maxim Gorky. From Gorky's hands, the money passed into Lenin's coffers. In this, too, Leonid Krasin played a central role.

Another source of income, by far the most secretive and controversial, was "foreign interests." During 1904-05, Tokyo's agent in Scandinavia, Col. Motojiro Akashi, dished out cash to foment sedition and rebellion across the Russian Empire. The Germans would do the same, on a larger scale, during WWI. But as far back as 1906, Russian authorities also suspected British and American hands in financing revolution. From 1905 to 1910, the Tsarist Government faced a veritable onslaught of revolutionary terrorism. From 1901 to 1917, but overwhelmingly concentrated in the post-1905 years, there were 23,000 acts of revolutionary violence which killed or wounded nearly 17,000 – mostly innocent bystanders. The Imperial authorities responded by putting to death another 7,800 persons, albeit only 214 for official "crimes against the state." The Tsarist regime was forced to fight for its life, and it won. Its most effective weapon was the secret police, popularly known as the Okhranka orOkhrana, which riddled the revolutionary parties with informers and agents provocateurs. The Okhranka was a ruthlessly effective organization but frequently seemed to follow some sinister agenda all its own. Tsar Nicholas was also ably served by his Prime Minister, Peter Arkadyevich Stolypin, who combined an iron fist with pragmatic reforms. Stolypin's 1911 assassination was a loss from which the regime never fully recovered. That his killer was a revolutionary, employed as a police informer, says much about the murky politics and loyalties of the time.

By 1909, terror was all but throttled and the radical cadres decimated, defeated and demoralized. In 1914, active membership for all parties dropped below 100,000, with the Bolsheviks numbering less than 20,000. They would be half that by early 1917. The simple fact was that the revolutionaries did not have the power to topple the Tsar, and they never would. That would be the handiwork of the Liberals.

The Russian Liberals

In the Russian context, "Liberal" basically referred to those who favored a constitutional monarchy or broad-based republic, but not a social revolution. The main embodiment was the Constitutional Democratic Party, popularly known as the Kadets, which came together in 1905. The outstanding personality of the Kadets was a lawyer, Paul (Pavel) Milyukov, a man who had very important connections in the United States. The Kadets could claim 50,000 members, drawn mostly from the professions, but in 1906 they too split into factions. The more conservative one, dubbed the Party of 17 October, or the Octobrists, was led by an ambitious millionaire industrialist, Alexander Guchkov.

While the Kadets and Octobrists touted themselves as the safe and sane alternative to revolution, there was always communication across the political divide. While liberals usually postured as supporters of the monarchy, many were as much Nicholas's enemy as any Bolshevik. The SR terrorist mastermind Boris Savinkov admitted that he received secret funding from the same Alexander Guchkov.

The "Jewish Question"

Perhaps no aspect of the Russian Revolution has generated more controversy and mythology than the role played by Jews in its origins, character and leadership. Since we will be making many, many references to persons of Jewish background, it is a question best confronted head-on and as objectively as possible. On one extreme lies the assertion, eagerly embraced by the likes of the Nazis, that not only did Jews play a dominant role in the Russian Revolution, but also that they gave it a peculiar Jewish agenda. On the other side is the contention that despite the significant number of Jews in the movement, there was absolutely no disproportionate or definable "Jewish influence" and to suggest otherwise is a crude anti-Semitic canard. Between these poles of damnation and denial the truth remains elusive.

The Russian Empire only acquired a significant Jewish population in the late 18 century when Catherine the Great annexed most of the former Kingdom of Poland. Catherine restricted Jews to the so-called Pale of Settlement, basically freezing them where they already lived. A century later, Russia ruled over more than half the world's Jews, most still dwelling within the Pale. The late 19 century saw more irksome and discriminatory restrictions, most notably the May Laws or Temporary Regulations Regarding the Jews enacted in 1882. These forbade Jews from moving into villages, from holding deeds or mortgages, and from doing business on Sundays and Christian holy days. A few years later, the Government imposed Jewish quotas in higher education and in the early 1890s there was the humiliating spectacle of mass expulsions of "illegal" Jews from Moscow and St. Petersburg.

(Continues...)

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Excerpted from Wall Street and the Russian Revolution 1905-1925 by Richard B. Spence. Copyright © 2017 Richard B. Spence. Excerpted by permission of Trine Day LLC.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Contents

Cover,
Title page,
Copyright page,
Dedication,
Publisher's Foreword,
Acknowledgments,
Abbreviations Used In Footnotes,
Introduction,
Prologue,
1) Two Empires,
2) Wall Street Dramatis Personae, And Others,
3) The Failed Revolution Of 1905,
4) The Revolutionary Road Show,
5) The "American Bolsheviki",
6) The Conspirators,
7) Trotsky In New York,
8) Come The Revolution – Again,
9) Bolshevism, Inc.,
10) The Dealmakers,
11) Kremlin Rules,
Index,