No. 1, 2005
Ph. D. (History)
LEND-LEASE: THE OIL FACTOR
The Allies' fuel shipments went a long way toward the Victory Day
Over the post-World War II period, volumes have been written about various aspects of cooperation between the anti-Hitler coalition countries. The Allies' relations within the lend-lease framework are also becoming public knowledge. Lend-lease is a unique phenomenon in the recent history of economic relations between Russia, the United States and the United Kingdom. Under the extreme conditions of the war the Allies succeeded in achieving mutual understanding and making effective practical use of international lend-lease arrangements.
In the hour of trial
On June 22, 1941, Nazi Germany committed an armed aggression against the USSR by surprise. Enemy aircraft and tank forces made deep thrusts into Soviet territory, destroying many of our planes, tanks, motor vehicles and fuel depots.
The fuel problems that had arisen compelled the Soviet Government to take prompt action. As early as June 29, 1941, just a week after the war had broken out, V. Molotov, People's Commissar of Foreign Affairs, flashed a cable to the U.S. Ambassador in the USSR saying: "Please see Roosevelt or Hull (or Welles) about the possibility of shipping to the USSR the following supplies by way of war aid: 1) single-engine fighter planes - 3 thousand, 2) bomber planes - 3 thousand.., 5) cracking and other plant for making high-grade aviation fuel and aviation oil. A five-year credit line to finance the purchase of these items would be welcome. Please telegraph results".
Making arrangements to keep the Soviet Army, Navy, factories and organizations supplied with armaments and industrial plant under lend-lease was a tall order. A military mission led by Lieutenant-General Filipp Golikov (a would-be Marshal) went to the United States via Great Britain to negotiate the details. The mission included Major-General A. Repin (Air Force).
The members of the Soviet mission and Ambassador K. Umansky were summoned by General George C. Marshall, Chief of Staff of the U.S. Army, straightaway. Recalls Edward R. Stettinius, then in charge of the Office of Lend-Lease Administration: "General Golikov was a man of memorable appearance: thick-set, with a clean-shaven skull and sun-bronzed face. He did most of the talking, while the tall and taciturn General Repin edged in remarks from time to time. Both generals insisted that there was no time to lose but were certain, nevertheless, that the Red Army would not be routed in summer and would even tip the scale to its favor early in winter… General Marshall found himself in a difficult situation trying to convince the Soviet representatives that at the moment the Americans did not have enough ships, tanks, artillery pieces, bombs, machine-tools and raw materials to start shipping war supplies to Russia there and then".
Being Air Force General, A. Repin certainly realized that planes were to be supplied complete with fuel (i.e. high-grade gasoline). Otherwise, the planes would be of no use.
Thus, the arrival of the Soviet mission in the United States on July 27, 1941 initiated the military-economic stage of negotiating and, later, implementing the would-be Lend-Lease program. Generals Golikov and Repin were received by the President of the USA, members of the U.S. Government and the Chairman of the Joint Chiefs of Staff. Addressing the Cabinet shortly afterwards, Franklin D. Roosevelt pointed out that over six weeks of being at war the Soviet Union had not received any of the supplies it needed.
Amtorg: the key link
By the summer of 1941, the Soviet-American Amtorg Trading Corporation, incorporated under New York State law, was seven years old. The USSR had no official trade mission in the United States, therefore Amtorg acted as the main procurement organization. After the outbreak of the war, Amtorg became the Soviet Government's purchasing agent in the United States.
Early in wartime, Amtorg set up specialized departments given over to the supply of armaments, raw materials, food, uniforms and other items to Soviet Union. Amtorg carried on this effort throughout the war. Over the initial eight months of the war, Amtorg handled the bulk of the military supplies flow. In four months, from June 23 to late October 1941, Amtorg paid its providers $92 million in cash for the shipments made - and kept their order books full. The amount included payments for 130,340 long tons of petroleum products (one long ton equals 1,016,047 kg). Just to compare: in 1929-30, 1,700 American companies sold only 94.5 million dollars' worth of goods through Amtorg.
Konstantin Lukashev (1906-1987), who was appointed Amtorg's Director in 1939, had an outstanding record of achievement: at the age of 32, he had taken out a doctor's degree in geology and mineralogy, was appointed to professorship and promoted from the head of the Soil Science Department to the Director of Leningrad University. He had taken part in drawing up the Baikal-Amur Railway construction project launched in 1938 and was later offered a responsible post at the People's Commissariat for Foreign Trade.
In order to increase the amount of Lend-Lease and vest extra powers in the supply agency acting on behalf of the USSR Government, the Soviet Government Purchasing Commission (SGPC) was made responsible for most of the war supplies traffic on February 25, 1942. The Commission was headed by Konstantin Lukashev for two months. In the meantime, commercial imports through Amtorg were carried on but in much smaller amounts, its worth diminishing from $9.6 million in 1943 to $3.3 million in 1944.
Upon Lukashev's transfer to the Soviet Government Purchasing Commission U.S., he was succeeded as the head of Amtorg by M. Gusev introduced into the SGPC in 1944.
Soviet specialists cooperated with their counterparts in various U.S. companies and organizations. Every order for supplies coming in from the Soviet Government was checked for conformity with the Lend-Lease Act. On the U.S. side, final decisions on the distribution of manufactured goods and raw materials rested with the Requirements Committee under the War Production Board (WPB) which worked in coordination with the Joint Production Resources Board and the Joint Raw Materials Board.
First lend-lease agreements
At the Moscow Conference of representatives from the USSR, the United States and the United Kingdom a secret protocol on the supply of military equipment to the Soviet Union under Lend-Lease (later referred to as the First (Moscow) Protocol) was signed. The matter of petroleum products supply, in particular, was discussed by specialists at 11 a.m. on September 30, 1941, with People's Commissar Anastas Mikoyan attending. The Moscow Protocol provided for the deliveries of petroleum products (aviation gasoline, its components, oils, lubricants, motor gasolines and gasoil) at a rate of 20,000 tons a month.
The First Protocol was to run for nine months, therefore we were to receive 180,000 tons of petroleum products. The supplier hit the target with some allowances made for losses inevitable in transportation during wartime. By June 21, 1942, we received 167,995 tons; altogether, the Allies supplied 298,349 tons of petroleum products over the first year of the war.
Under protocols 2-4, a total of another 1,408,894 tons was added to the previous deliveries. Over the period of June 22, 1941 to September 20, 1945 the USSR received a total of 2,113,409 long tons of petroleum products. Another 572,979 tons arrived from the refineries of Canada, Great Britain and Iran. All in all, Lend-Lease petroleum product supplies added up to 2,686,388 long tons.
Over the war years, the USSR produced and received 4,396,000 tons of aviation gasoline, Lend-Lease supplies included. According to the statistics provided by the USSR Planning Committee's First Department, imports and Lend-Lease supplies accounted for no less than 18.1% of aviation gasoline consumption in the annual national product in 1941-1945. There is every reason to believe that the actual figure was at least double the one quoted above. Aviation gasoline with the octane rating of above 99 constituted 1,163,413 tons; with the octane ratings of 87-90, 122,415; and with the octane rating of 87 and lower, 19,690. These figures cover the entire import from the U.S. and the U.K. to the USSR with some cargo losses and reconsignments taken into account. Consequently, the USSR received, as a matter of fact, 1,305,518 long tons (without regard for clear fractions) or almost a half of the total Lend-Lease petroleum products supplies.
Considering that the hostilities at the Soviet-German front lasted for 1,320 days, and at the Soviet-Japanese front, for 24 days, which makes a total of 1,344 days, and that average gasoline consumption per sortie constituted about a third of a ton, simple arithmetic will show that the amount of gasoline supplied under lend-lease was enough to fly 3.92 million combat missions (1,305,518/0.333), i.e. to send 3,000 aircraft on combat missions daily (3.92 million sorties/1,344 days). According to historical statistics, from 6,500 to 18,800 planes were committed to action simultaneously on Soviet and German sides in the course of hostilities, i.e. an average of 3,250 to 9.400 planes on each side. That means that aviation gasoline supplied under Lend-Lease could satisfy from 33% to 90% of the entire Soviet Air Force's requirements in various periods of the war.
Gasoline quality issue
In Azerbaijan, the USSR's leading oil producer, oilmen exerted themselves to the utmost to back the war effort. The voluntarist decision to found a "second Baku" imposed extra strain on them while detracting from original Baku's production capacity. Nevertheless, the local refineries kept overfulfilling their plans. In 1942-1944, Baku supplied over one million tons of B-78 aviation gasoline to the army in the field.
Consequently, the amount of aviation gasoline supplied under Lend-Lease over the war years was comparable with the output of all the Baku refineries. As to quality, gasoline supplied from abroad was superior to our own and measured up to the standards required by the 18,700 Lend-Lease aircraft that had arrived from the U.S. and the U.K.
Indeed, Aircobras, Hurricanes, Spitfires, Bostons, Kingcobras, Warhawks, Tomahawks and other combat aircraft were fueled with grade 99 and grade 100 gasoline, while German Messerschmitt-109s, with grade 87 gasoline. It took high-quality petroleum products to defeat the enemy.
Under the Lend-Lease Act, the United States also supplied 242,300 long tons of motor gasoline to the USSR. Other petroleum product supplies included mixed fuel, fuel oils, lubricants, oil dopes, fuel additives, etc.
The Allies supplied to the USSR nearly 145 million dollars' worth of petroleum products - or an estimated $1,586,000 in mid-2004 prices with regard for the average 4% annual inflation rate. The worth of each ton of petroleum products supplied to the USSR in wartime amounts to $590 if converted into current prices net of any extras such as customs duties, VAT, excises.
Access to new technologies
The Soviet Government reached an agreement with the Roosevelt's Administration on including six refining complexes in the lend-lease program. As a result, new refineries fitted out with U.S.-supplied equipment were constructed in Orenburg, Krasnovodsk and Kuybyshev. On August 21, 1943, the People's Commissariat for the Oil Industry issued an order that a cracking facilities complete with process lines supplied by the United Stated under the lend-lease agreement to be constructed in the Kryazh area outside Saratov.
The total worth of the refining equipment supplied under lend-lease amounted to about $43 million - approximately $500 million in current prices.
Among other items the USSR received under the Lend-Lease Act were collapsible pipelines, portable oil storage tanks, drilling equipment and research instruments. An American field pipeline 100 mm in diameter and 220 km long was deployed in the rear of the Second Ukrainian Front. Via that pipeline, fuel was supplied from Ploesti (Romania) to the Reni oil tank farm (USSR) whence it proceeded by rail to the troops of the Second and the Third Ukrainian Fronts, the Black Sea Fleet and the Danube Flotilla. A total of over 600,000 tons of fuel was delivered along that pipeline.
The worth of the petroleum products and associated lend-lease supplies (including railway tank cars, tankers, special-purpose motor vehicles) is estimated at over $200 million in wartime prices and, accordingly, at $2.5 billion in current prices.
Article V of the Lend-Lease Agreement between the United States and the USSR signed on June 11, 1942, provided that the Government of the USSR was to return to the United States of America, upon the termination of extraordinary circumstances and pursuant to the decision of the President of the United States of America, the defense materials received under the Agreement that have not been destroyed, lost or used up. In May, 1947, the Memorandum concerning the estimation of lend-lease supplies in the possession of the USSR after the cessation of combat action against Japan in 1945 was handed over to the Soviet Union which evaluated the USSR's debt to the United States at $2,607 million including a 23 million dollars' worth of petroleum products, machines and equipment, refinery, in particular, and the cost of their deliveries.
The problem of the USSR debt to the United States for Lend-Lease supplies remains but will, hopefully, be resolved before very long.
Lend-Lease went a long way toward overpowering Nazism, the Allies' common enemy, sixty years ago and provided a strong economic and technological impetus to the post-war progress of the Soviet oil production and refining industries.