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Capitalist Industrialists, Communist Industry - Foreign involvement by Henry Ford and Saul Bron in Soviet Industrialisation (1924-1932)
Source disclaimer:
The main source of this article is an article by Sonia Melnikova-Raich, "The Soviet Problem with Two 'Unknowns': How an American Architect and a Soviet Negotiator Jump-Started the Industrialization of Russia. Part II: Saul Bron". IA, Journal of the Society for Industrial Archeology 37 (1/2): 5–28 (2011).
AMTORG
Amtorg was the soviet body eventually tasked with procuring neccesary foreign technical expertise for its rapid industrialisation. Its most notable operative of the period was Saul Bron. A good way to follow not only American involvement but British as well in Russian Industrialisation is to follow the activities of Saul Bron, he was a very unfortunate figure in of he was asked to do a job on the direct orders of Stalin, only for it to be decided that it made him a threat. He was essentially the architect on the Russian side of all the western involvement after his appointment to be chairman of Amtorg in 1927.
As with many figures of the time, we don’t know a whole lot about Bron’s history before the formation of Soviet Russia, record keeping in Russia was very sketchy during the Tsarist period, most of the people important enough to be written about were exiled, emigrated or fell from importance during the purge of Russian intelligentsia that happened at the time.
What we do know is that when the Soviet government were looking to establish state organs that needed educated people, especially people who spoke other languages, Saul Grigorievich Bron was found. He was born in Odessa and briefly attended the Kiev Institute of Commerce, but was expelled for involvement in the Social Democratic movement, he emigrated and was educated abroad in Germany, France and Switzerland and gained a degree in Economics from Zurich University. He first served as the trade commissioner for Ukraine, and after the formation of the USSR was appointed to the Supreme Economic Council of the RSFSR (Russian Soviet Federative Socialist Republic), he then moved on to head the Grain exporting agency of Russia Exportkhleb, and served on the board of the Russian foreign trade bank Roskombank.
This lead him high up in Russian society and eventually after the embarrassing failure of the first Russian trade mission to the US, Charles Sorensen, Ford’s head of production that was handling the negotiation recalled:
“Not only words had to be translated, but working principles of private enterprise had to be explained to uncomprehending Communists. I might just as well have been talking to a delegation from Mars.”
Bron was appointed head of Amtorg and given the mission to exploit the favourable views of some Americans towards Russia (People like Senator Borah, the chairman of the Senate foreign relations committee) to secure trade deals for Russia. He was well suited for this job, being familiar with the west and fluent in English and German from his schooling abroad. He was acting essentially as a single buyer and seller for the entirety of Communist Russia in the US. All trade deals went through him and it was his job to promote them. He set about work with enthusiasm, within a year of him being appointed he had more than doubled US trade with the USSR.
American industry warmed very quickly to the man, Time wrote of the USSR in 1929:
“It is not so many years since ‘Bolshevik’ was a popular synonym for a low, ruffianly fellow and ‘ruble’—for the ultimate in worthless money. But though the U.S. Department of State remains un-aware of the existence of the Union of Soviet Socialist Republics, U.S. industry is now inclined to believe that Russians habitually pay their bills and that a ruble in the hand is as good as 51½¢ in the bank.”
And later the same year:
“[W]hen he first came to Manhattan three years ago, cheerful Comrade Bron used to ask business acquaintances why the U.S. did not recognize Soviet Russia. Today he considers that question of academic and rather secondary importance. Commercial recognition of the Soviet Union by U.S. industry is now wholehearted, enthusiastic.
Making special reference to Bron in the same article and his recently signed contracts with Hugh L Cooper and Company for the $100 million construction of the Dneprostroi hydroelectric dam, (More on that later), General Electric for development of the Soviet industrial grid for a 6 year contract to carry out the “Electrification of the workforce” demanded by Lenin and 3 other major companies for other factories.
I’m going to look at the Hydroelectric dam and G.E at this stage to give a flavour of these two very important projects.
Dneprostroi Hydroelectric Dam.
This dam at the time of its construction was the largest hydroelectric dam in the world, it would become a symbol to the Russian people of their march towards progress and industrialisation, it provided 80GW of power when first designed. This dam’s construction resulted in the awarding to American engineers 6 Orders of the Red Banner of labour, the turbines were manufactured by GE and the design and build supervised by Hughes Company, it provided power for Dnipropetrovsk, Zaporizhia and Kryvy Rih and most importantly gave the electricity for the aluminium electrolysis factories necessary for the emerging aircraft industry. Aluminium electrolysis is to this day one of the single most energy intensive resource extraction processes. This is also the dam that would be blown in 1941 on Stalin’s orders during the red army’s retreat, flooding the Dniepr’s banks and drowning thousands of Ukrainian civilians who were not informed or evacuated being caught in the sudden flood.
General Electric’s involvement.
This is a significant involvement for two reasons, the first is historical, GE had $1.75 million of assets in Russia that were seized and nationalised with the revolution, this debt was part of a major reason that Russia had no relations with the US, the US denied access to its credit markets and diplomatic relations to any country that had significant debts that they were not attempting to fulfil, and the seizure of property was designated a part of that. This debt was to be resolved as part of the deal, though it made only a small dent in the overall debt to the US of $800 million over all the companies that owed debt.
The second reason that this contract was so important is that GE was the major partner for the planning of the soviet electrification plan, GOELRO. The contract was worth in total around $26 million initially but further contracts were signed, they formed a design bureau that rather like Kahn’s was involved in every aspect of the Soviet grid, and every single branch of Russian industry relied on GE for its industrialisation.
Henry Ford and Nizhny Novgorod.
The negotiations with Ford were among the most difficult that Bron had to pursue, Russia had failed to negotiate with Ford before, but Stalin especially was very set on the idea of a deal with Bron, Fordist mass production was the real deal as far as he was concerned, as was observed at the time by a writer for the New York Times:
“The word for industrialization in Russia is Americanization, and the passion to Ford-ize the Soviet Union is even stronger than the passion to communize it.”
Ford represented the ultimate in progress as far as Russia was concerned, so Stalin sent Bron along with Vice chairman of the VSNKh (Supreme soviet of the national economy) Valery Mezhlauk, and chairman of the State bank of the USSR, Aron Sheinman, to demonstrate that the USSR meant business. When negotiations stalled Bron did investigate working with GM, GM were far more open to the original deal offered to ford in 1926, operating as a concession and to providing a generous line of credit, (all Russian deals signed had some degree of credit involved from the company due to the lack of hard currency). Stalin made his preference for Ford clear but said he would accept a contract with GM.
However after much wrangling in 1929 the contract was signed, the single largest contract that was signed between the USSR and an American company, it was for the construction of the Nizhny Novgorod car production complex. The contract was worth $30 million (remembering that figure was around the value of all US-USSR trade in 1928), and it specified:
“to erect in the U.S.S.R. an automobile plant or plants for the manufacture of passenger automobiles similar to the Ford Model ‘A’ and commercial trucks similar to the Ford Model ‘AA’ with all improvements which may be embodied therein by the Ford Company during the term of this agreement.”
The contract granted Avtostroi rights to all Ford patents at the time and in the future along with their production methods, they were granted the license to make and sell ford units throughout the USSR and for engineers from Russia to visit River Rouge and other ford plants to learn the methods of production and to be taught the technical procedures.
At the start of the plants life ford supplied Ford A cars and AA trucks in kit form to train the workers as the plants were build, this took place in a nearby factory in Kanavino and at the KIM plant in Moscow, both also designed by Albert Kahn. These were prefabricated steel frames produced in the US as most early buildings were. These two plants were early builds while work was being prepared for the Nizhny Novgorod (Gorky) automobile plant.
The plant was paid for in gold to the value of $40 million, if the work was finished in 15 months there was to be a significant bonus paid, (Soviet estimates were 4 years, the actual construction time was a hair under the 15 months promised by Ford). Indeed at this stage Ford was so ingrained that during the construction process the stationary at the plant was printed with the Ford address in the US.
The plant was originally called Nizhny Novgorod Automobile plant (NAZ) it was renamed in 1933 to the Gorky automobile plant (GAZ) and then again in 1935 to the Molotov automobile plant (ZIM), 2 out of the 3 of those acronyms being very common in the soviet military vehicle line-up as manufacturers. The plant was the second largest automobile plant in the world, second only to the original plant at River Rouge, its projected capacity was 94’000 trucks and 50’000 cars.
Ford AA truck produced initially.
GAZ AAA truck produced later.
Note the similarities in the design between the two trucks indicating the GAZ’s heritage.
In 1935 the Gorky plant transitioned to producing the BT tanks and the T-38 tanks and several armoured cars of various types, the T-37, T-38 and T-40 tanks shared the engines of the Ford AA and GAZ AA/M trucks that were produced at this plant, it would transition in 1943 to making the Su-76. The KIM plant in Moscow and Gudok Oktyabrya in Kanavino switched to making armoured cars as well as the T-37 and T-41 tank.
Thanks in a large amount to the deals with Ford, the USSR was flooded with eager American companies looking to do business there, Bron estimated around 2000 firms were involved in some way, and the USSR climbed to sixth place in receipt of US exports and the US was the single greatest country of origin for imports into the USSR, displacing Germany.
Bron did not push for recognition of the USSR diplomatically but he held the view that due to the large amount of business being conducted by US companies in the USSR they would pressure the US government into lifting the embargo so they could enjoy full diplomatic protections and negotiate larger deals.
Vice president of GM, James Mooney observed:
“What are we going to do about the Russian menace anyway? Shall we stop selling them machinery and equipment? I visited a great variety of mines, factories and powerhouses in Russia and I saw very little machinery and equipment that could not be duplicated out of European countries, and that these countries would not be glad to sell Russia.”
Which was indeed what was beginning to happen.
Trade with the UK.
Comrade Bron ended his term at Amtorg in 1930 and as the British government guaranteed $150 million in credit for the USSR to do business with British firms he was sent there next to revive relations after the 1927 raid of the ARCOS facility based on espionage charges (which were happening, Scotland Yard seized ciphers and a list of Russian agents in South America and Europe).
He enjoyed similar rapid success, he signed contracts with Imperial Chemical Industries and Armstrong-Vickers to supply fertilizer and tractors on a credit basis, he also signed with the Associated British Machine Tool Makers for factory equipment. Most relevant however was hisd dealings with the textile industry, he entered into vast deals with the Manchester based manufacturers of textile machinery, the size of the deals was so large it worried the actual textile producers of Manchester that they would soon suffer massive competition from abroad and they tried to have the deal quashed, but in a meeting of the Manchester Chamber of Commerce its leader Herbert Lee said, “If Russia places large orders, if she keeps to the spirit and the letter of the contract, what more do we need as businessmen?” and that was that.
Bron’s departure and the rewriting of history.
In 1931 the Politburo recalled Bron to the USSR, the Russian ambassador said, “Mr Saul Bron has left London on a temporary visit to Moscow.” As was the case for many many Russians, the temporary in temporary visit to Moscow turned out to refer to his life expectancy.
Stalin commissioned a book series about the history industrialisation of the Soviet Union, he removed it from the charge of VSNKh and placed it in the charge of OGIZ under the supervision of the Council of Peoples Commissars, the project was written according to the new ideological order that was starting to take hold of Russia, the revision of history and its changing into a tool of propaganda.
Bron was appointed on his return to the USSR chamber of commerce, a mostly ceremonial position, and in 1935 he was demoted to deputy head of OGIZ, the Association of State Book and Magazine producers, under Mikhail Tomsky. A man who met him in the, UK Sir Walter Citrine head of the TUC (Trade Union Congress) met him again in Moscow on a visit and recalled:
We had a long chat together, in the course of which both impressed upon me that the Revolution had proved worthwhile. I was astonished that both Tomsky and Bron were so enthusiastic despite their own bitter experience. Then again, I did not know what the position of our interpreter was. He might conceivably be a GPU man, and they might quite well know this.”
My bet is that the interpreter was indeed a GPU man and both of them were being very closely watched at this stage, it was under a year until the start of the show trials in August 1936. Tomsky committed suicide as they started, anticipating his own arrest, Bron was then promoted to head of OGIZ until 1937 where he assumed control of writing the History of Industrialisation.
While Bron was in charge of OGIZ Stalin’s paranoia reached a peak, he wrote the following:
“OGIZ is contaminated with alien elements, members of Trotskyist-Bukharinist, Cadet, Social Revolutionary, Menshevik, Bundist, and German-Japanese organizations… traitors and spies beginning with . .. Tomsky and Bron… all this scum must be kicked out, burned out with a red-hot iron”
He wrote a memo to the Commissar of Defence Comrade Mekhelis, (Nicknamed Red Army Inquisitor):
“Comrade Yudin submitted a list of 29 employees. Most of them have already been expelled from the Party or arrested. But there still are dozens of questionable people in OGIZ who are hostile to the Soviet government... Com. Yezhov. Must arrest all this OGIZ scum. I. Stalin.”
Bron was arrested October 25th 1937, all copies of the History of Industrialisation were seized by the NKVD and destroyed, this was largely because editing and rewriting of the texts could not keep up with the changes that were taking place in the Soviet approach to history and with the disappearance of the people involved.
Bron himself was tried in a trial that lasted 15 minutes, he was charged with having been an active member of a right wing anti soviet diversionary terrorist organisation and an associate of one of its leaders, Tomsky, publishing Trotskyite counter revolutionary literature, preparing a terrorist attack against Comrade Stalin and being an agent of British intelligence. He was executed by firing squad about an hour after his trial, his wife would soon die in a labour camp for wives of enemies of the state. His body lies in a mass grave at Kommunarka along with:
Valery Mezhlauk, the other major negotiator in the Ford contract.
Innokentii Khalepsky and Mark Sorokin, the two people who landed with Bron at New York dock to run Amtorg.
Marshal Tukhachevsky, leader of Red Army reform and Modernisation.
700 people linked to Marshal Tukhachevskys modernisation program at Government House.
Sergey Dyakonov, first director of the Gorky auto plant.
Elizar Gurevich, first head engineer of Chelyabinsk plant
Almost all specialists trained by Kahn associates in Moscow or Detroit, numbering over 4000.
Kazimir Lovin, first director of the Chelyabinsk tractor plant.
V Ivanov, first director of the Stalingrad tractor plant
P Svistun, first director of the Kharkov plant
The Commissar of Heavy Industry G. Ordzhonikidze committed suicide as he saw his empire ravaged by Stalin, thousands were executed or sent to the gulag, Stalin would reorganise industry so that nobody as powerful as Ordzhonikidze would ever rise again and set the rivalries between industrial segments and the military I wrote about earlier to ensure he could divide and rule all parts of the Soviet state.
All Americans in the USSR either got the hell out after 1934, when Fords contract was terminated, or they were arrested and sent to the Gulag, an unknown quantity of Americans and other foreign nationalities died in the gulags after having come to work in the USSR during the great depression. After 1935 no trainers were left in the country and the vast majority of those with first-hand experience had been executed for being tainted by capitalism.
These mass executions enhanced Stalin’s ability to rewrite history, to shape himself as the Great Architect of Communism, and it was by such methods that Saul Bron, Albert Kahn and the USA were written out of Soviet Industrial History.
The effects
After the purges began, soviet industrial growth dropped from 30% in 1936 to 12% in 1938, this drop was attributed to subversive activity which tragically was used to execute many of the specialists who could manage to reverse this trend. When the NKVD came knocking at the factories to arrest people for low productivity, a grim joke at the time from the workers left was that if the factories had as many engineers as the NKVD then there would be no need for them to come back. Soviet industrial growth was gutted by the Purges, it lead to systemic lack of quality and drops in productivity which were only exacerbated by the reorganisation of industry to be more directly controlled by Stalin. Machines were run into the ground without maintenance out of fear for punishment for not meeting the demands of the plan which caused significant attrition of equipment to breakdowns and men to the NKVD.
Stalin admitted in conversation with the head of the American Chamber of Commerce, Eric Johnston that around two-thirds of all large industrial enterprises in the USSR were built with US material aid of technical assistance, personally I would guess it was much higher than that. The entire industrial base of the USSR was laid by American expertise. Kahn would be pilloried for this after his death during the US’ own revisionist history stage of the Red Scare, in a book written by Anthony Sutton, “Western Technology and Soviet Economic Development 1917–1930 and National Suicide: Military Aid to the Soviet Union” he was heavily criticised for the technological transfer that he gave to the USSR, but failed to examine the positive aspects, such as not having Hitler in control over Russia.
Albert Kahn died in 1942 of natural causes a highly decorated architect, 60 of his buildings are in the American National Register of Historic Places, he received the Chevalier legion d’honneur from the Paris institute of Arts and Sciences, and a special award from the American Institute of Architects for his work in preparing the country for WW2. He was responsible for the design of the Chrysler tank arsenal, the Ford willow run bomber plant and the Wright Aeronautical plant of Wood Ridge. His most vital legacy to my mind was the fact that from the West came the Shermans and Liberators built from his factories in the US, and from the east came the T-34’s and IL-2 bombers built from his factories in the USSR. He is one of the most important figures in the history of WW2 and is probably the single man most responsible for the Allied war machine, Without Albert Kahn and other Americans assistance and expertise I sincerely doubt that the USSR would have survived Hitler’s onslaught, the industry he was hired to build was so efficient and robust that it gave the Russians the material quantity they needed to trade for time to get on their feet and drive Hitler back to Berlin.
Major contracts.
49 major contracts were signed between the USSR and American companies, I will list a few of the more vital ones but to be honest they were all vital:
Allen and Garcia Company, Chicago, Illinois—Technical assistance in design and construction of coal mines in Donbass in the Ukraine and Kuzbass in Siberia.
Hugh L. Cooper and Company, Inc., New York, New York—consulting engineers for construction of
Dnieper Hydroelectric Power Plant.
Arthur P. Davis, Lyman Bishop & Associates, Oakland, California—consulting engineers for irrigation projects
in Central Asia and Transcaucasia.
Ford Motor Company, Detroit, Michigan—Technical assistance in construction and operation of Nizhny
Novgorod (Gorky) automobile plant and production of cars and trucks.
International General Electric Company (I.G.E.), Schenectady, New York—Technical assistance in development of electrical industry
Moscow. McDonald Engineering Company, Chicago, Illinois— Technical assistance in construction of industrial plants.
Newport News Shipbuilding and Drydock Company, Newport News, Virginia—Technical assistance in construction of hydraulic electric turbines and generators.
Sperry Gyroscope Company, Brooklyn, New York— Technical assistance in manufacture of sonic detectors, directoscopes, gyroscopes, and other instruments.
J. C. White Engineering Co., New York, New York— Consulting services for Svir Hydroelectric Plant near Leningrad.
Albert Kahn Architects and Engineers, Inc., Detroit, Michigan—Designing buildings for the Stalingrad Tractor Plant and general contract for consulting services in industrial construction.
Source disclaimer:
The main source of this article is an article by Sonia Melnikova-Raich, "The Soviet Problem with Two 'Unknowns': How an American Architect and a Soviet Negotiator Jump-Started the Industrialization of Russia. Part II: Saul Bron". IA, Journal of the Society for Industrial Archeology 37 (1/2): 5–28 (2011).
AMTORG
Amtorg was the soviet body eventually tasked with procuring neccesary foreign technical expertise for its rapid industrialisation. Its most notable operative of the period was Saul Bron. A good way to follow not only American involvement but British as well in Russian Industrialisation is to follow the activities of Saul Bron, he was a very unfortunate figure in of he was asked to do a job on the direct orders of Stalin, only for it to be decided that it made him a threat. He was essentially the architect on the Russian side of all the western involvement after his appointment to be chairman of Amtorg in 1927.
As with many figures of the time, we don’t know a whole lot about Bron’s history before the formation of Soviet Russia, record keeping in Russia was very sketchy during the Tsarist period, most of the people important enough to be written about were exiled, emigrated or fell from importance during the purge of Russian intelligentsia that happened at the time.
What we do know is that when the Soviet government were looking to establish state organs that needed educated people, especially people who spoke other languages, Saul Grigorievich Bron was found. He was born in Odessa and briefly attended the Kiev Institute of Commerce, but was expelled for involvement in the Social Democratic movement, he emigrated and was educated abroad in Germany, France and Switzerland and gained a degree in Economics from Zurich University. He first served as the trade commissioner for Ukraine, and after the formation of the USSR was appointed to the Supreme Economic Council of the RSFSR (Russian Soviet Federative Socialist Republic), he then moved on to head the Grain exporting agency of Russia Exportkhleb, and served on the board of the Russian foreign trade bank Roskombank.
This lead him high up in Russian society and eventually after the embarrassing failure of the first Russian trade mission to the US, Charles Sorensen, Ford’s head of production that was handling the negotiation recalled:
“Not only words had to be translated, but working principles of private enterprise had to be explained to uncomprehending Communists. I might just as well have been talking to a delegation from Mars.”
Bron was appointed head of Amtorg and given the mission to exploit the favourable views of some Americans towards Russia (People like Senator Borah, the chairman of the Senate foreign relations committee) to secure trade deals for Russia. He was well suited for this job, being familiar with the west and fluent in English and German from his schooling abroad. He was acting essentially as a single buyer and seller for the entirety of Communist Russia in the US. All trade deals went through him and it was his job to promote them. He set about work with enthusiasm, within a year of him being appointed he had more than doubled US trade with the USSR.
American industry warmed very quickly to the man, Time wrote of the USSR in 1929:
“It is not so many years since ‘Bolshevik’ was a popular synonym for a low, ruffianly fellow and ‘ruble’—for the ultimate in worthless money. But though the U.S. Department of State remains un-aware of the existence of the Union of Soviet Socialist Republics, U.S. industry is now inclined to believe that Russians habitually pay their bills and that a ruble in the hand is as good as 51½¢ in the bank.”
And later the same year:
“[W]hen he first came to Manhattan three years ago, cheerful Comrade Bron used to ask business acquaintances why the U.S. did not recognize Soviet Russia. Today he considers that question of academic and rather secondary importance. Commercial recognition of the Soviet Union by U.S. industry is now wholehearted, enthusiastic.
Making special reference to Bron in the same article and his recently signed contracts with Hugh L Cooper and Company for the $100 million construction of the Dneprostroi hydroelectric dam, (More on that later), General Electric for development of the Soviet industrial grid for a 6 year contract to carry out the “Electrification of the workforce” demanded by Lenin and 3 other major companies for other factories.
I’m going to look at the Hydroelectric dam and G.E at this stage to give a flavour of these two very important projects.
Dneprostroi Hydroelectric Dam.
This dam at the time of its construction was the largest hydroelectric dam in the world, it would become a symbol to the Russian people of their march towards progress and industrialisation, it provided 80GW of power when first designed. This dam’s construction resulted in the awarding to American engineers 6 Orders of the Red Banner of labour, the turbines were manufactured by GE and the design and build supervised by Hughes Company, it provided power for Dnipropetrovsk, Zaporizhia and Kryvy Rih and most importantly gave the electricity for the aluminium electrolysis factories necessary for the emerging aircraft industry. Aluminium electrolysis is to this day one of the single most energy intensive resource extraction processes. This is also the dam that would be blown in 1941 on Stalin’s orders during the red army’s retreat, flooding the Dniepr’s banks and drowning thousands of Ukrainian civilians who were not informed or evacuated being caught in the sudden flood.
General Electric’s involvement.
This is a significant involvement for two reasons, the first is historical, GE had $1.75 million of assets in Russia that were seized and nationalised with the revolution, this debt was part of a major reason that Russia had no relations with the US, the US denied access to its credit markets and diplomatic relations to any country that had significant debts that they were not attempting to fulfil, and the seizure of property was designated a part of that. This debt was to be resolved as part of the deal, though it made only a small dent in the overall debt to the US of $800 million over all the companies that owed debt.
The second reason that this contract was so important is that GE was the major partner for the planning of the soviet electrification plan, GOELRO. The contract was worth in total around $26 million initially but further contracts were signed, they formed a design bureau that rather like Kahn’s was involved in every aspect of the Soviet grid, and every single branch of Russian industry relied on GE for its industrialisation.
Henry Ford and Nizhny Novgorod.
The negotiations with Ford were among the most difficult that Bron had to pursue, Russia had failed to negotiate with Ford before, but Stalin especially was very set on the idea of a deal with Bron, Fordist mass production was the real deal as far as he was concerned, as was observed at the time by a writer for the New York Times:
“The word for industrialization in Russia is Americanization, and the passion to Ford-ize the Soviet Union is even stronger than the passion to communize it.”
Ford represented the ultimate in progress as far as Russia was concerned, so Stalin sent Bron along with Vice chairman of the VSNKh (Supreme soviet of the national economy) Valery Mezhlauk, and chairman of the State bank of the USSR, Aron Sheinman, to demonstrate that the USSR meant business. When negotiations stalled Bron did investigate working with GM, GM were far more open to the original deal offered to ford in 1926, operating as a concession and to providing a generous line of credit, (all Russian deals signed had some degree of credit involved from the company due to the lack of hard currency). Stalin made his preference for Ford clear but said he would accept a contract with GM.
However after much wrangling in 1929 the contract was signed, the single largest contract that was signed between the USSR and an American company, it was for the construction of the Nizhny Novgorod car production complex. The contract was worth $30 million (remembering that figure was around the value of all US-USSR trade in 1928), and it specified:
“to erect in the U.S.S.R. an automobile plant or plants for the manufacture of passenger automobiles similar to the Ford Model ‘A’ and commercial trucks similar to the Ford Model ‘AA’ with all improvements which may be embodied therein by the Ford Company during the term of this agreement.”
The contract granted Avtostroi rights to all Ford patents at the time and in the future along with their production methods, they were granted the license to make and sell ford units throughout the USSR and for engineers from Russia to visit River Rouge and other ford plants to learn the methods of production and to be taught the technical procedures.
At the start of the plants life ford supplied Ford A cars and AA trucks in kit form to train the workers as the plants were build, this took place in a nearby factory in Kanavino and at the KIM plant in Moscow, both also designed by Albert Kahn. These were prefabricated steel frames produced in the US as most early buildings were. These two plants were early builds while work was being prepared for the Nizhny Novgorod (Gorky) automobile plant.
The plant was paid for in gold to the value of $40 million, if the work was finished in 15 months there was to be a significant bonus paid, (Soviet estimates were 4 years, the actual construction time was a hair under the 15 months promised by Ford). Indeed at this stage Ford was so ingrained that during the construction process the stationary at the plant was printed with the Ford address in the US.
The plant was originally called Nizhny Novgorod Automobile plant (NAZ) it was renamed in 1933 to the Gorky automobile plant (GAZ) and then again in 1935 to the Molotov automobile plant (ZIM), 2 out of the 3 of those acronyms being very common in the soviet military vehicle line-up as manufacturers. The plant was the second largest automobile plant in the world, second only to the original plant at River Rouge, its projected capacity was 94’000 trucks and 50’000 cars.
Ford AA truck produced initially.
GAZ AAA truck produced later.
Note the similarities in the design between the two trucks indicating the GAZ’s heritage.
In 1935 the Gorky plant transitioned to producing the BT tanks and the T-38 tanks and several armoured cars of various types, the T-37, T-38 and T-40 tanks shared the engines of the Ford AA and GAZ AA/M trucks that were produced at this plant, it would transition in 1943 to making the Su-76. The KIM plant in Moscow and Gudok Oktyabrya in Kanavino switched to making armoured cars as well as the T-37 and T-41 tank.
Thanks in a large amount to the deals with Ford, the USSR was flooded with eager American companies looking to do business there, Bron estimated around 2000 firms were involved in some way, and the USSR climbed to sixth place in receipt of US exports and the US was the single greatest country of origin for imports into the USSR, displacing Germany.
Bron did not push for recognition of the USSR diplomatically but he held the view that due to the large amount of business being conducted by US companies in the USSR they would pressure the US government into lifting the embargo so they could enjoy full diplomatic protections and negotiate larger deals.
Vice president of GM, James Mooney observed:
“What are we going to do about the Russian menace anyway? Shall we stop selling them machinery and equipment? I visited a great variety of mines, factories and powerhouses in Russia and I saw very little machinery and equipment that could not be duplicated out of European countries, and that these countries would not be glad to sell Russia.”
Which was indeed what was beginning to happen.
Trade with the UK.
Comrade Bron ended his term at Amtorg in 1930 and as the British government guaranteed $150 million in credit for the USSR to do business with British firms he was sent there next to revive relations after the 1927 raid of the ARCOS facility based on espionage charges (which were happening, Scotland Yard seized ciphers and a list of Russian agents in South America and Europe).
He enjoyed similar rapid success, he signed contracts with Imperial Chemical Industries and Armstrong-Vickers to supply fertilizer and tractors on a credit basis, he also signed with the Associated British Machine Tool Makers for factory equipment. Most relevant however was hisd dealings with the textile industry, he entered into vast deals with the Manchester based manufacturers of textile machinery, the size of the deals was so large it worried the actual textile producers of Manchester that they would soon suffer massive competition from abroad and they tried to have the deal quashed, but in a meeting of the Manchester Chamber of Commerce its leader Herbert Lee said, “If Russia places large orders, if she keeps to the spirit and the letter of the contract, what more do we need as businessmen?” and that was that.
Bron’s departure and the rewriting of history.
In 1931 the Politburo recalled Bron to the USSR, the Russian ambassador said, “Mr Saul Bron has left London on a temporary visit to Moscow.” As was the case for many many Russians, the temporary in temporary visit to Moscow turned out to refer to his life expectancy.
Stalin commissioned a book series about the history industrialisation of the Soviet Union, he removed it from the charge of VSNKh and placed it in the charge of OGIZ under the supervision of the Council of Peoples Commissars, the project was written according to the new ideological order that was starting to take hold of Russia, the revision of history and its changing into a tool of propaganda.
Bron was appointed on his return to the USSR chamber of commerce, a mostly ceremonial position, and in 1935 he was demoted to deputy head of OGIZ, the Association of State Book and Magazine producers, under Mikhail Tomsky. A man who met him in the, UK Sir Walter Citrine head of the TUC (Trade Union Congress) met him again in Moscow on a visit and recalled:
We had a long chat together, in the course of which both impressed upon me that the Revolution had proved worthwhile. I was astonished that both Tomsky and Bron were so enthusiastic despite their own bitter experience. Then again, I did not know what the position of our interpreter was. He might conceivably be a GPU man, and they might quite well know this.”
My bet is that the interpreter was indeed a GPU man and both of them were being very closely watched at this stage, it was under a year until the start of the show trials in August 1936. Tomsky committed suicide as they started, anticipating his own arrest, Bron was then promoted to head of OGIZ until 1937 where he assumed control of writing the History of Industrialisation.
While Bron was in charge of OGIZ Stalin’s paranoia reached a peak, he wrote the following:
“OGIZ is contaminated with alien elements, members of Trotskyist-Bukharinist, Cadet, Social Revolutionary, Menshevik, Bundist, and German-Japanese organizations… traitors and spies beginning with . .. Tomsky and Bron… all this scum must be kicked out, burned out with a red-hot iron”
He wrote a memo to the Commissar of Defence Comrade Mekhelis, (Nicknamed Red Army Inquisitor):
“Comrade Yudin submitted a list of 29 employees. Most of them have already been expelled from the Party or arrested. But there still are dozens of questionable people in OGIZ who are hostile to the Soviet government... Com. Yezhov. Must arrest all this OGIZ scum. I. Stalin.”
Bron was arrested October 25th 1937, all copies of the History of Industrialisation were seized by the NKVD and destroyed, this was largely because editing and rewriting of the texts could not keep up with the changes that were taking place in the Soviet approach to history and with the disappearance of the people involved.
Bron himself was tried in a trial that lasted 15 minutes, he was charged with having been an active member of a right wing anti soviet diversionary terrorist organisation and an associate of one of its leaders, Tomsky, publishing Trotskyite counter revolutionary literature, preparing a terrorist attack against Comrade Stalin and being an agent of British intelligence. He was executed by firing squad about an hour after his trial, his wife would soon die in a labour camp for wives of enemies of the state. His body lies in a mass grave at Kommunarka along with:
Valery Mezhlauk, the other major negotiator in the Ford contract.
Innokentii Khalepsky and Mark Sorokin, the two people who landed with Bron at New York dock to run Amtorg.
Marshal Tukhachevsky, leader of Red Army reform and Modernisation.
700 people linked to Marshal Tukhachevskys modernisation program at Government House.
Sergey Dyakonov, first director of the Gorky auto plant.
Elizar Gurevich, first head engineer of Chelyabinsk plant
Almost all specialists trained by Kahn associates in Moscow or Detroit, numbering over 4000.
Kazimir Lovin, first director of the Chelyabinsk tractor plant.
V Ivanov, first director of the Stalingrad tractor plant
P Svistun, first director of the Kharkov plant
The Commissar of Heavy Industry G. Ordzhonikidze committed suicide as he saw his empire ravaged by Stalin, thousands were executed or sent to the gulag, Stalin would reorganise industry so that nobody as powerful as Ordzhonikidze would ever rise again and set the rivalries between industrial segments and the military I wrote about earlier to ensure he could divide and rule all parts of the Soviet state.
All Americans in the USSR either got the hell out after 1934, when Fords contract was terminated, or they were arrested and sent to the Gulag, an unknown quantity of Americans and other foreign nationalities died in the gulags after having come to work in the USSR during the great depression. After 1935 no trainers were left in the country and the vast majority of those with first-hand experience had been executed for being tainted by capitalism.
These mass executions enhanced Stalin’s ability to rewrite history, to shape himself as the Great Architect of Communism, and it was by such methods that Saul Bron, Albert Kahn and the USA were written out of Soviet Industrial History.
The effects
After the purges began, soviet industrial growth dropped from 30% in 1936 to 12% in 1938, this drop was attributed to subversive activity which tragically was used to execute many of the specialists who could manage to reverse this trend. When the NKVD came knocking at the factories to arrest people for low productivity, a grim joke at the time from the workers left was that if the factories had as many engineers as the NKVD then there would be no need for them to come back. Soviet industrial growth was gutted by the Purges, it lead to systemic lack of quality and drops in productivity which were only exacerbated by the reorganisation of industry to be more directly controlled by Stalin. Machines were run into the ground without maintenance out of fear for punishment for not meeting the demands of the plan which caused significant attrition of equipment to breakdowns and men to the NKVD.
Stalin admitted in conversation with the head of the American Chamber of Commerce, Eric Johnston that around two-thirds of all large industrial enterprises in the USSR were built with US material aid of technical assistance, personally I would guess it was much higher than that. The entire industrial base of the USSR was laid by American expertise. Kahn would be pilloried for this after his death during the US’ own revisionist history stage of the Red Scare, in a book written by Anthony Sutton, “Western Technology and Soviet Economic Development 1917–1930 and National Suicide: Military Aid to the Soviet Union” he was heavily criticised for the technological transfer that he gave to the USSR, but failed to examine the positive aspects, such as not having Hitler in control over Russia.
Albert Kahn died in 1942 of natural causes a highly decorated architect, 60 of his buildings are in the American National Register of Historic Places, he received the Chevalier legion d’honneur from the Paris institute of Arts and Sciences, and a special award from the American Institute of Architects for his work in preparing the country for WW2. He was responsible for the design of the Chrysler tank arsenal, the Ford willow run bomber plant and the Wright Aeronautical plant of Wood Ridge. His most vital legacy to my mind was the fact that from the West came the Shermans and Liberators built from his factories in the US, and from the east came the T-34’s and IL-2 bombers built from his factories in the USSR. He is one of the most important figures in the history of WW2 and is probably the single man most responsible for the Allied war machine, Without Albert Kahn and other Americans assistance and expertise I sincerely doubt that the USSR would have survived Hitler’s onslaught, the industry he was hired to build was so efficient and robust that it gave the Russians the material quantity they needed to trade for time to get on their feet and drive Hitler back to Berlin.
Major contracts.
49 major contracts were signed between the USSR and American companies, I will list a few of the more vital ones but to be honest they were all vital:
Allen and Garcia Company, Chicago, Illinois—Technical assistance in design and construction of coal mines in Donbass in the Ukraine and Kuzbass in Siberia.
Hugh L. Cooper and Company, Inc., New York, New York—consulting engineers for construction of
Dnieper Hydroelectric Power Plant.
Arthur P. Davis, Lyman Bishop & Associates, Oakland, California—consulting engineers for irrigation projects
in Central Asia and Transcaucasia.
Ford Motor Company, Detroit, Michigan—Technical assistance in construction and operation of Nizhny
Novgorod (Gorky) automobile plant and production of cars and trucks.
International General Electric Company (I.G.E.), Schenectady, New York—Technical assistance in development of electrical industry
Moscow. McDonald Engineering Company, Chicago, Illinois— Technical assistance in construction of industrial plants.
Newport News Shipbuilding and Drydock Company, Newport News, Virginia—Technical assistance in construction of hydraulic electric turbines and generators.
Sperry Gyroscope Company, Brooklyn, New York— Technical assistance in manufacture of sonic detectors, directoscopes, gyroscopes, and other instruments.
J. C. White Engineering Co., New York, New York— Consulting services for Svir Hydroelectric Plant near Leningrad.
Albert Kahn Architects and Engineers, Inc., Detroit, Michigan—Designing buildings for the Stalingrad Tractor Plant and general contract for consulting services in industrial construction.
