Fifty Years Of Tyranny: The Intolerable Legacy Of The Nazi-Soviet Agreements Of August 1939

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Fifty years ago this week, one of the most heinous and cynical agreements of all time was signed. This accord — the infamous Non-Aggression Pact between Adolf Hitler’s Nazi Germany and the Soviet Union under Joseph Stalin — featured a secret protocol that carved up Eastern Europe, guaranteed Hitler a safe eastern front and set the stage for the Second World War.

Since the end of that conflict, however, the Molotov-Ribbentrop pact (named for the Soviet and Nazi foreign ministers who initialled it) has been for many in the West little more than an historical footnote. Recent events in the Soviet bloc — notably the formation of a 400-mile human chain running from Lithuania to Latvia in protest of the fiftieth anniversary of the Pact — have forcefully revealed, however, that this reprehensible accord continues to have significance even today.

That significance is due in part to the continued presence of Soviet troops in nations first subjected to occupation by the USSR as a result of Hitler and Stalin’s secret protocol. While less well understood, the Non-Aggression Pact is also relevant to the contemporary international environment because it was in considerable measure the product of a German-Soviet commercial relationship that is structurally similar to current FRG-Soviet trade and financial relations.

The 1939 Trade Agreement

As early as April 1936, the Soviet Union and Nazi Germany had recognized that commercial ties could work to their mutual benefit despite the profound ideological antipathy between the fascist and communist regimes. In the words of Molotov:


    The development of commercial and economic relations with other states, irrespective of the political forces that are temporarily ruling those countries, is in conformity with the policy of the Soviet Government. We think that it is also in the interests of the German people.(1)

This sentiment produced a relatively modest trade agreement in 1936 which was subsequently extended for one year in December 1938. It was not until 19 August 1939, however, that the two countries reached, after months of intensive negotiations, a far-reaching accord on economic relations. The Nazi-Soviet Trade Agreement of 1939 featured a number of momentous provisions, some of whose terms were kept secret, including the following(2):

  • Germany granted the Soviet Union a merchandise credit of 200 million Reichsmarks (worth billions of dollars in today’s terms), to be financed by the German Golddiskontbank. This loan would be 100% guaranteed by the German government and entail an interest rate of only 5 percent (average 7 year maturity), of which (in accordance with a secret protocol) 1/2 percent was to be refunded to Soviet special accounts in Berlin.

  • The credit was to be used to finance Soviet orders in Germany to include machinery, industrial installations and certain armaments.

  • The credit was to be repaid by Soviet raw materials with delivery to start immediately upon signature. Such materials would include items vital to the German military, notably phosphate, platinum, petroleum, cotton and feed grain.


A senior German negotiator reported to Berlin his estimate that the agreement had an anticipated trade value on the order of 1 billion Reichsmarks and added that: "Apart from the economic import of the treaty, its significance lies in the fact that the negotiations also served to renew political contacts with Russia and that the credit agreement was considered by both sides as the first decisive step in the reshaping of political relations."(3)

The Non-Aggression Pact

The 1939 Nazi-Soviet Trade Agreement was concluded just four days prior to the signing of the Non-Aggression Pact and was the essential precursor to the latter accord. Immediately upon receiving word that the trade agreement had been signed, Hitler telegraphed a message to Stalin welcoming it as "the first step in the reordering of German-Soviet relations." Hitler was so eager to cement this new partnership with a political document — the Non-Aggression Pact — that he declared that he would accept a Soviet draft of the pact, with "the substance of the supplementary [i.e., the secret] protocol desired by the Government of the Soviet Union" to be "clarified in the shortest possible time."(4)

Toward that end, Hitler dispatched his Foreign Minister, von Ribbentrop, to Moscow to negotiate the deal himself. The Non-Aggression Pact and its secret Protocol were signed on 23 August 1939, along the lines of the Soviet-proposed draft and after only a few hours of discussion. The implications of such an arrangement were clear at once to the two dictators. Stalin cabled his German counterpart: "The assent of the German Government to the conclusion of a non-aggression pact provides the foundation for eliminating the political tension and for the establishment of peace and collaboration between our countries."(5) Hitler exulted, "Now I have the whole world in my pocket."(6)

While the Non-Aggression Pact was trumpeted by both tyrants with great fanfare, they kept its Protocol secret. The purpose — if not the exact terms — of these accords soon became clear to their victims(7), however:

  • The Pact was to assure a mutual "peaceful coexistence" between Nazi Germany and the Soviet Union. It thereby left each free to move aggressively against its neighbors and to continue horrific repression at home.

  • The Nazi and Communist leaders committed their nations to "desist from attacks" on each other, not to be "part of any grouping of powers whatsoever that is directly or indirectly aimed at the other," and not to lend support to any third party engaged in "belligerent action" against either party.

  • Under the protocol’s terms, the two empires decided to divide Eastern Europe into "spheres of influence" with the Baltic nations of Finland, Estonia and Latvia, as well as Bessarabia in Southeastern Europe in the Soviet orbit and Lithuania in Nazi Germany’s.

  • The protocol also provided for the partitioning of Poland for the fourth time in its history, with German and Soviet occupation spheres delineated and Poland’s ultimate destiny to be decided by the two powers. As a direct result of the Pact, Soviet armies moved into eastern Poland within three weeks of the invasion launched by Hitler on September 1st.


The Immediate Repercussions of the German-Soviet Agreements

The Soviet Union’s collaboration with Nazi Germany had immediate and profoundly deleterious effects:


    The Trade Agreement

The insidiousness of the 1939 Nazi-Soviet Trade Agreement was not limited to the essential role it played in laying the groundwork for the Non-Aggression Pact. It also effectively guaranteed Germany’s access to items critically required for the coming war. By so doing, the trade accord both contributed materially to Hitler’s ability to undertake that war and to the devastation that ensued.

Pursuant to the Trade Agreement, Soviet raw materials flowed steadily into the Reich as Hitler attacked Poland, Denmark, Norway, the Benelux countries, and France. Similarly, oil from Iran was transported through the Soviet Union and other supplies were shipped from Japan and the Far East via the Trans-Siberian railway. Interestingly, Germany received a 50 percent discount on such transshipments thanks to the terms of a supplementary commercial agreement of 11 February 1940.(8) Soviet trains sustaining Hitler’s war-machine did not stop rolling westward until that machine was turned on the USSR when Nazi armies invaded it in June 1941.


    The Non-Aggression Pact

The Non-Aggression Pact secured Nazi Germany’s eastern frontier, thereby giving Hitler the confidence to precipitate the war against the Western allies. It carved up Poland and subjected the Baltic nations to occupation and, ultimately to Soviet annexation.

The opprobriousness of Soviet complicity in this action is heightened by the fact that it occurred after the British and French governments had finally decided to end their policy of appeasing Hitler. Indeed, the very week the Non-Aggression Pact was signed, senior British and French military delegations were in Moscow discussing the details of military action to be taken jointly against Nazi aggression.

Stalin’s sudden embrace of the Nazis also had the effect of converting communist parties in Britain, France, the United States and elsewhere from rabid anti-Nazis into proponents of an utterly defeatist line and, in some cases, of extensive efforts to sabotage the Allied war efforts.

The Soviet Union’s Continuing Culpability

The long-term benefits of German-Soviet cooperation anticipated by the authors of the Trade Agreement and the Non-Aggression Pact did not materialize. In 1941, Hitler’s armies invaded the Soviet Union. Several years later, the "thousand-year Reich" was destroyed, its leaders eliminated either by their own hands or by the victors for war crimes they committed under the Nazi regime. Hitler’s alliances and treaties were shattered — through his own duplicity or with his defeat. And yet, the results of the Non-Aggression Pact and its secret protocol live on while the Nazi-Soviet Trade Agreement holds lessons to this day.


    The Geostrategic Repercussions

The most obvious, lingering effect of the Non-Aggression Pact is the continuing occupation of the Baltic states by the USSR. The secret protocol to this accord also set the stage for the Soviet Union’s on-going domination of Poland and the creation of a Soviet sphere of influence elsewhere in Eastern Europe through its seizure of vast areas during World War II and its holding of them by force ever since.

As of this writing, the Soviet Government has still not fully revealed the Pact’s details. Neither has the USSR taken responsibility for or corrected the injustices perpetrated pursuant to its deals with Nazi Germany. In response to the growing outcry from Baltic nationalists and others, however, Soviet President Mikhail Gorbachev has appointed a commission headed by Alexander Yakovlev — a close associate and the Politburo’s chief propagandist — to review the Non-Aggression Pact, its circumstances and consequences.

While Yakovlev has acknowledged that the secret protocol was illegal, he has, nonetheless, maintained that the subsequent incorporation of Baltic countries into the Soviet Union must be considered as historically justifiable on the grounds that it was "approved" by legislative bodies in each of the Baltic States. He neglects to mention that these legislatures were actually Soviet-appointed elements "elected" without opposition under Soviet occupation; these "captive nations" were in no position to do other than accede to the USSR’s de facto annexations.


    The Economic Repercussions

In the economic sphere, it should be recognized in the West, and particularly in West Germany, that the technical structure of current Soviet-West German trade and financial relations is similar to the bilateral trade agreement of 1939. Albeit that the sharp ideological difference between the Germans and the Soviets of the earlier era was one of fascism versus communism whereas it is now one of democracy versus Gorbachev’s version of Marx and Lenin’s teachings, the notion persists that trade and credits between the two countries can overcome such political differences.

Now, as then, manufactured goods, technology and generous credit terms are basically bartered for Soviet raw materials, notably energy resources. Similarly, many important details of current German-Soviet trade and financial flows are kept secret, just as was done in 1939. Enough is known, however, to raise serious concerns that West German trade and credit is primarily directed toward bailing out the Soviet Union’s backward economy, rather than toward encouraging — to say nothing of being in any way tied to — systemic economic and political reforms in the USSR.

Conclusion: Fifty Years is Enough

The West German government many years ago declared the Hitler-Stalin Pact and its fatal terms to be shameful and to be legally null and void. It is high time the Soviet Union did the same. Accordingly, Western governments and publics should immediately join those within the East bloc who are calling upon the Yakovlev Commission and the Soviet government formally to repudiate the August 1939 agreements and the Nazi-Soviet collaboration in political, economic and military spheres of which they were a part — the repercussions of which are still being felt.

Such a repudiation should be manifested by the Soviet government announcing that the people of Estonia, Latvia, Lithuania, Poland and, indeed those throughout Eastern Europe, could henceforth determine their own destinies, free of Soviet domination or interference.

It is time, too, that the secret aspects of the German-Soviet economic and financial relationship are replaced by full transparency and data disclosure. The Western democratic allies require a true sense of the dimensions and terms of this relationship. A new, more open approach by Bonn on these matters would greatly advance prospects for the coordination and constructive use of Allied economic and financial leverage needed to bring about the true transformation of the Soviet system to one embracing democracy and free markets and committed to peace.

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1. James E. McSherry, Stalin, Hitler and Europe, Vol. I, (New York: The World Publishing Co., 1968), p. 42.

2. Raymond Sontag, Nazi-Soviet Relations 1939-1941, (New York: Didier Publishers, New York), 1968.

3. Ibid., p. 85. (Emphasis added.)

4. Ibid., p. 66.

5. Ibid., p. 69.

6. McSherry, op. cit., p. 213.

7. Sontag, op. cit., pp. 83-85.

8. Sontag, op. cit., pp. 132-133

Center for Security Policy

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