History's greatest heist : the looting of Russia by the Bolsheviks

HISTORY'S GREATEST HEIST: THE LOOTING OF RUSSIA BY THE BOLSHEVIKS SEAN MCMEEKIN YALE UNIVERSITY PRESS, 2009 HARDCOVER, $38.00, 308 PAGES, PHOTOGRAPHS, ABBREVIATIONS, NOTES, BIBLIOGRAPHY, INDEX Russia had been one of the greatest success stories of the capitalist world in the decade leading up to World War I. War and wartime inflation undermined the government's legitimacy, however, and led to power falling into the hands of increasingly radical elements, ending up with Lenin. The Bolshevik takeover led to the near paralysis of the Russian economy. In the midst of the world's largest forest, the Bolsheviks were soon running out of paper to print their decrees, propaganda, and currency. What did they have to sell to buy imported weapons to help them stay in power? In a powerful and surprising new book, HISTORY'S GREATEST HEIST: THE LOOTING OF RUSSIA BY THE BOLSHEVIKS, author Sean McMeekin makes a powerful and surprising argument that Lenin and his followers imposed a policy of looting the national treasures that Russia had amassed over the centuries. Those treasures consisted of gold, silver, and precious jewelry on a massive scale. This didn't prove as immediately successful as the Bolshevik braintrust had hoped. For example, "inventory shrinkage" proved a problem. When Lenin and Trotsky called for mobs to sack the local landowners, bourgeois households, and churches and send the loot to Moscow, the amount received wasn't as lucrative as expected. Rather a large percentage seemed to stick to the fingers of local Bolshevik operatives. The author shows in this formidably documented, morally impassioned book that the Bolsheviks could have never survived their first years in power without the cooperation of Western governments, industrialists, and financiers. That's because their first act on seizing power was to deliberately destroy Russia's economy, leaving the regime wholly dependent on foreign financing. Beyond dialectical materialism, the Bolsheviks didn't have the slightest idea how a modern economy or financial system worked. This was made even worse, when on December 27, 1917, they abolished private banks and repudiated government bonds which effectively destroyed the system for investors to invest and the workers to work. If the principal function of most governments is to cultivate law and public order, then the opposite happened under the Bolsheviks-eradicate all existing laws and institutions and encourage class war. With the nation's economy now wrecked and its banking system abolished, the Bolsheviks had nothing to encourage foreign buyers to invest. Accordingly, they acted less like a government than like a gang of thieves. They couldn't for instance open the safe-deposit boxes in most Russian banks and so they decreed that all owners of the boxes were to turn over their keys-that is, to help the government rob them. What they did manage to confiscate-from banks, churches, and private owners, most notably the Romanovs-they proceeded to fence surreptitiously and at a huge discount. McMeekin's book bristles with the names of the Soviets who went to Switzerland with suitcases full of cash and jewels. Lenin found Stockholm banker Olof Aschberg, who would purchase Russian gold ingots at a huge discount in Estonia and then ship it across the Baltic to the Swedish Royal Mint. They then worked overtime melting down the Russian ingots (stamped with the Tsarist Russian seal) that were subsequently sold in London and New York. Aschberg would then sell the Bolsheviks the weapons they needed for their civil war and subsequent war against their peasantry. And while the Allied powers officially banned such sales, they effectively looked the other way when they saw how much money could be made. On the political front, then British Prime Minister Lloyd George, tired of blockading the Baltic, had legitimized Soviet trade representatives in order to get orders for British factories. The British signed a trade agreement with the Soviets in 1921 and the German Foreign Office, which had done so much to put Lenin in charge of Russia, signed one at Rapallo in 1922. HISTORY'S GREATEST HEIST: THE LOOTING OF RUSSIA BY THE BOLSHEVIKS is filled with vivid images of theft and spoliation, of warehouses full of loot, and millions of rubles. But the real value of this book is that it shows just how well the West lived up to Lenin's cynical statement-"Comrades, don't panic, when things get very tough for us, we will give the bourgeoisie a rope, and the bourgeoisie will hang itself." Lt. Colonel Robert A. Lynn, Florida Guard Orlando, Florida Historians have never resolved a central mystery of the Russian Revolution: How did the Bolsheviks, despite facing a world of enemies and leaving nothing but economic ruin in their path, manage to stay in power through five long years of civil war? In this penetrating book, Sean McMeekin draws on previously undiscovered materials from the Soviet Ministry of Finance and other European and American archives to expose some of the darkest secrets of Russia’s early days of communism. Building on one archival revelation after another, the author reveals how the Bolsheviks financed their aggression through astonishingly extensive thievery. Their looting included everything from the cash savings of private citizens to gold, silver, diamonds, jewelry, icons, antiques, and artwork. By tracking illicit Soviet financial transactions across Europe, McMeekin shows how Lenin’s regime accomplished history’s greatest heist between 1917 and 1922 and turned centuries of accumulated wealth into the sinews of class war. McMeekin also names names, introducing for the first time the compliant bankers, lawyers, and middlemen who, for a price, helped the Bolsheviks launder their loot, impoverish Russia, and impose their brutal will on millions. "Historians have never resolved a central mystery of the Russian Revolution: How did the Bolsheviks, despite facing a world of enemies and leaving nothing but economic ruin in their path, manage to stay in power through five long years of civil war? In this book, Sean McMeekin draws on previously undiscovered materials from the Soviet Ministry of Finance and other European and American archives to expose some of the darkest secrets of Russia's early days of communism. Building on one archival revelation after another, the author reveals how the Bolsheviks financed their aggression through astonishingly extensive thievery. Their looting included everything from the cash savings of private citizens to gold, silver, diamonds, jewelry, icons, antiques, and artwork." "By tracking illicit Soviet financial transactions across Europe, McMeekin shows how Lenin's regime accomplished history's greatest heist between 1917 and 1922 and turned centuries of accumulated wealth into the sinews of class war. McMeekin also names names, introducing for the first time the compliant bankers, lawyers, and middlemen who, for a price, helped the Bolsheviks launder their loot, impoverish Russia, and impose their brutal will on millions."--Jacket Contents......Page 8 List of Abbreviations......Page 10 A Note on Transliteration, Names, and Translation......Page 12 A Note on the Relative Value of Money Then and Now......Page 13 Prologue: The Patrimony of Imperial Russia......Page 17 Introduction to Bolshevik Gold: The Nature of a Forgotten Problem......Page 24 I. The Heist......Page 32 1. The Banks......Page 34 2. The People......Page 58 3. The Gokhran......Page 77 4. The Church......Page 96 II. Cashing In......Page 122 5. Brest-Litovsk and the Diplomatic Bag......Page 124 6. Blockade......Page 146 7. Stockholm......Page 166 8. London......Page 197 9. Rapallo......Page 228 Epilogue: From Stockholm to Sotheby’s......Page 245 Dramatis Personae......Page 252 Notes......Page 262 Selected Bibliography......Page 302 Acknowledgments......Page 315 Index......Page 320 B......Page 321 C......Page 322 F......Page 323 I......Page 324 L......Page 325 M......Page 326 Q......Page 327 R......Page 328 S......Page 329 V......Page 330 Z......Page 331 Contents 8 List of Abbreviations 10 A Note on Transliteration, Names, and Translation 12 A Note on the Relative Value of Money Then and Now 13 Prologue: The Patrimony of Imperial Russia 17 Introduction to Bolshevik Gold: The Nature of a Forgotten Problem 24 I. The Heist 32 1. The Banks 34 2. The People 58 3. The Gokhran 77 4. The Church 96 II. Cashing In 122 5. Brest-Litovsk and the Diplomatic Bag 124 6. Blockade 146 7. Stockholm 166 8. London 197 9. Rapallo 228 Epilogue: From Stockholm to Sotheby’s 245 Dramatis Personae 252 Notes 262 Selected Bibliography 302 Acknowledgments 315 Index 320 A 321 B 321 C 322 D 323 E 323 F 323 G 324 H 324 I 324 J 325 K 325 L 325 M 326 N 327 O 327 P 327 Q 327 R 328 S 329 T 330 U 330 V 330 W 331 Y 331 Z 331 Historians have never resolved a central mystery of the Russian Revolution: how did the Bolsheviks, despite facing a world of enemies and leaving nothing but economic ruin in their path, manage to stay in power through five long years of civil war? This book exposes some of the darkest secrets of Russia's early days of communism.