The Golden Blockade of 1925

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Denying-History
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The Golden Blockade of 1925

Postby Denying-History » Thu Oct 05, 2017 5:58 am

I am in a bit of need for some help with this claim as It hardly seems to be true but I don't have the best evidence against it:

In early 1920s the recently proclaimed Soviet Union was anxious about restoration of its industry totally destroyed after WWI and Civil War in Russia (1918-1921). The Soviets desperately needed modern machinery and industrial equipment. How could they pay it? Soviet government was able to offer to the international market three items: grain, minerals and gold.

[...]

In 1925 the Soviet leadership decided to accelerate industrialization of the country. Quite surprisingly despite enormous economic gains promised by such policies, the Western countries refused to accept gold as payment when trading with Soviet Union! This amazing behaviour of is known in history as the “gold blockade”. The USSR could pay for machinery and equipment only by oil, timber and grains. (Interestingly, they still accepted pre-revolution Imperial Russian golden coins – the currency of a non-existent state was not dangerous!)

In 1929 the US bankers initiate the Great Depression. The short period of international currency exchange stability was over.

In 1931 Germany and Austria failed to repay the foreign debt and stop exchanging marks into gold, thus abolishing Gold Exchange Standard. By the autumn 1931 the UK suspends the gold exchange as well.

As you see, it would be a logical and natural move to lift the golden blockade of Soviet Union at that time, thus allowing Soviet gold to relieve the suffocating Western economies. But the decision they was taken at that circumstances was shocking in its absurdity. They not only left the gold blockade of the USSR in force, but also imposed a severe trade embargo on the major part of Soviet export! It was done despite acute economic crisis in the West where most producers were interested in any kind of demand, especially paid by gold, timber, oil and other raw material from the Soviet Union. E.g. in 1932 80% of British machinery export was being supplied to the USSR. Nevertheless, on April 17, 1933 the British government introduced embargo: Russian Goods (Import Prohibition) Act 1933! What was the logic? It was a politically motivated decision to pressure the tenacious Soviet government powered by the antagonistic ideology and economic structure.

https://orientalreview.org/2012/12/17/episodes-10-who-organised-famine-in-the-ussr-in-1932-1933/

But from my previous readings this doesn't seem to be true. Gold itself especially during the famine turned into a very important export of the soviet union that they skimmed off from the farmers who were starving in the Ukraine. They then traded this gold to the Germans for tractors. Gold itself shockingly was an unlisted export:

The Soviet Union achieved some success in its efforts to increase industrial exports. Gold exports, which do not form part of the published statistics, were somewhat lower than in the previous year; but still exceeded gold production. Great efforts were also made to sell antiques and works of art abroad, with only a small effect on the balance of payments. Greater Success was achieved with manufactured goods and raw materials. The Soviet Union produced textiles lengths, metal goods, china and glass at special enterprises earmarked for export, and exports of all these items increased in 1932.

(Source: The Industrialization of Soviet Russia Volume 4, Davies, p.315)

The Soviet's also during this period of time actually increased gold production, though the Gulag labor system. Under the German-Soviet trade agreements they actually were able to trade with Germany to finance industrialization. While "no precise figures are available" for the amount of gold and precious metals exported, Davies suggests that the value it had brought in for 1931-1932 was 100 million rubles. See page 164 of the same book.

The increase of the Grain export is actually just one more factor of Soviet dumping during the period, the same is true for lumber. Here is a short excerpt from Mellon: An American Life (A book that I do not own and also haven't read):

During the first half of 1930...the Soviet Union had recently begun dumping large quantities of grain, lumber, and oil on the American market, in a desperate drive for currency to finance the new five-year plan... (p.397)


So gold continued to be exported, its main case is also centered around Britain refusing to take any gold currency made after 1914 in 1925. This move was obviously not applied only to the USSR, so this conduct of discussion seems worthless for such a case. This ban is new to me as I don't understand British history very well in relation to the period. Regardless it was in the middle of a depression and one could ask if such actions would be unjustified.
Last edited by Denying-History on Thu Oct 05, 2017 5:01 pm, edited 1 time in total.
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Re: The Golden Blockade of 1925

Postby Jeffk 1970 » Thu Oct 05, 2017 1:41 pm

Hhhhmmmmm, that's a new one.

Well, it doesn't seem right, if Stalin was truly concerned about the plight of those suffering he easily could have slowed or halted the drive towards industrialization.

The use of starving out opponents existed during the Civil War, the Bolsheviks and Whites took turns terrorizing and starving each other's supporters during the war. Seems to me Stalin simply used this method to suppress active minorities while raising grain to export for badly needed manufacturing items. This occurred throughout the USSR but was particularly bad in the Ukraine.

The author is also ignoring the active efforts to suppress Kulaks and the subsequent attacks on minorities during the Great Purge. Seems like a good thing to bring up with Upton O Goode, he seems well versed in Soviet history.

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Re: The Golden Blockade of 1925

Postby Gawdzilla Sama » Thu Oct 05, 2017 1:54 pm

Dumbass peaks:
In 1929 the US bankers initiate the Great Depression.
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Re: The Golden Blockade of 1925

Postby Denying-History » Thu Oct 05, 2017 3:39 pm

Gawdzilla Sama wrote:Dumbass peaks:
In 1929 the US bankers initiate the Great Depression.


That's far from the most revealing portion considering it goes on to quote Putin as a justification. Not to mention it is a Russian media outlet, conspiracy is their hot point you know.

Thing is though I have found sources that confirm the claim of the golden blockade:

Even once the blockade was lifted in January 1920, following the defeat of foreign intervention in Russia, the Allied countries refused to accept Soviet gold as payment. The “gold blockade” meant vital imports were denied to Russia. Under the tsarist regime 58 percent of industrial plant and 45 of percent of agricultural machinery had been imported. The collapse of industrial production and the production of agricultural machinery – for example, plough production in 1920 was 13 percent of its 1913 figure – desperately needed to be addressed, and the blockade compounded the situation.


http://www.marxists.de/russrev/trudell/civilwar1.htm

The piece that I mainly take problem with this source though is it sources E.H. Carr a popular writer before Robert Conquest, who has gotten a fair share of criticism for his views on the Soviets being "too positive". There is enough evidence to suggest a blockade existed. It really mainly stems to how long it lasted.
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Re: The Golden Blockade of 1925

Postby Gawdzilla Sama » Thu Oct 05, 2017 4:10 pm

Never heard of any blockade.
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Re: The Golden Blockade of 1925

Postby Denying-History » Thu Oct 05, 2017 4:45 pm

Yeah, its rather new to me... All reading that I have had before suggests that Gold was still an export during the time. The article obviously has some hint of truth to it, but how much of it is true is hard to find out.
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Re: The Golden Blockade of 1925

Postby Gawdzilla Sama » Thu Oct 05, 2017 4:59 pm

Yeah, the hint of truth is that 1929 was an actual year. After that it goes to {!#%@}.
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Re: The Golden Blockade of 1925

Postby Denying-History » Thu Oct 05, 2017 5:24 pm

This all really depends though, the 2nd source argues it was gold in general as payment, while the first article argues it was ether "gold as payment" and the "Soviet Golden Chervonets" (A stolen currency from the Tsarist empire.)

The first one is completely irrational under the condition that gold could used as payment for supplies from Germany from the start of 1931. The 2nd piece may be true if the English actually were not accepting gold coins, which would make some sense considering they were actually in depression, but it however makes little sense though considering that if only the English were blockading them (and not Weimar Germany) then they would have someone who was accepting their trade offers.

I updated the first post with a bit more info from the article where he argues the English put an embargo on Soviet exports in April of 1933. A move that seems justified considering that Soviet dumping would have been driving down the prices world market.

All in all the Soviets dumped in total around 3,760,000 Tons of grain on the world market in 1932 and 1933. Enough to feed 13,019,139 million people for an entire year. (Based on the per-capita eating's of a Soviet peasant.) Form 1930 to 1933 they had dumped a grand total of 14,378,000 tons of grain enough to feed 49,784,359 people for a year.

During the famine in Ukraine a total of 263 Torsgin stores brought in 66 tons of Gold and 1,439 tons of Silver to the USSR economy.

http://ncua.inform-decisions.com/eng/files/also_gold_etc.pdf

I think what this brought in itself is descriptive on its own.
« Oral history is a complex field. After all, memory can be a distorting mirror, as anyone who has ever worked with memoir literature knows very well...They may be imperfect, and, at times, inaccurate as the narrator tries to cast himself in the most favorable light, but all sources are imperfect. Even an archival document reflects how the person who drafted it understood something and remains something less than the unvarnished truth. »
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Re: The Golden Blockade of 1925

Postby Gawdzilla Sama » Thu Oct 05, 2017 5:45 pm

Mr. Peabody was more entertaining.
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