Archive

No. 4, 2006

Prof. Boris Shpotov,
Dr. Sc. (History)

BUSINESS WILL ENVOY


Ivy Lee, advisor to John Rockefeller, visited the Soviet Union in 1927 to prepare the ground for establishing diplomatic relations between the United States and USSR

Oil has been both a reason for rivalry and cooperation in the history of Russian-U.S. relations. For example, close acquaintance with the operations of the Standard Oil Co. helped Soviet oilmen to accumulate good experience in the 1920s. Incidentally, the John Rockefeller group had a kerosene concession in Batumi and regularly bought Soviet petroleum products in order to resell them on the world markets. In 1927, Ivy Lee (1877-1934), John Rockefeller's public relations advisor, visited the Soviet Union, thus giving a powerful boost to the establishment of mutually advantageous relations between the United States and the Soviet Russia.

Overcoming the barriers of the past

During the first quarter of the 20th century, relations between Russia and the United States developed rather painstakingly and contradictorily under the influence of the profound changes and social upheavals going on in the world. To stress the point, Russia had survived three revolutions and two wars, emerging from them devastated and exhausted. The rise to power of the Bolshevik government in 1917 was met with acute disapproval from most of the Western states, leading to a policy of international political isolation. Official Washington, like other Western countries, broke off its diplomatic relations and erected serious barriers to the development of business relations. Soviet-American relations went into an extended period of permafrost.

In the mid-1920s, American business began to show a more obvious interest in its new economic partner, the Soviet Union. In turn, the Soviet government expressed its willingness to accept mutual diplomatic recognition at any moment based on the principle of mutual benefit with no strings attached. This would have allowed the United States and the Soviet Union to develop trade through lending, set up embassies and consulates, simplify the procedure for obtaining visas, legalize the rights of their citizens and organizations in both countries, and participate on equal terms in world politics.

But there was quite of number of people overseas who were against recognizing a country that refused to return the debts of the former Russian governments, compensate for the property of American citizens confiscated during the revolution, and that was intent on spreading world revolution propaganda. Succumbing to the requests of its businessmen, the U.S. government permitted trade with Russia in the summer of 1920, but at their own risk. The matter went no further than this, although over the next few years quite a few changes took place in the world.

The Soviet state grew stronger, was recognized by many countries, and became a major international trade player and an influential force abroad. The United States faced the choice of succumbing to the demands of the times or sticking to its previous stance of not recognizing the Soviet government, but not having the opportunity to influence it. The international oil business was a kind of barometer of the political situation. The Rockefeller Company decided to take advantage of the aggravation in Anglo-Soviet relations at the end of 1926, which led to their temporary breakdown on May 27, 1927 (the Chamberlain Note). The conservative government accused the Soviet Union of stirring up anti-British sentiments in China, subversive activity in London, and violating the trade agreement.

In this situation, the Soviet leadership chose to expand cooperation with American companies. On September 1, 1927, the Communist Party Politburo instituted a standing commission for technical and scientific ties with America. It included the Rockefellers' "old acquaintance" Alexander Serebrovsky, who entered into business relations with Standard Oil when he headed the Azneft trust.

In this way, by making contact with the Bolsheviks, John Rockefeller counted both on obtaining especially privileged business treatment in the Soviet Union, and on raising his rating in the United States. All that remained was to find a relatively well-known person well-versed in political affairs who could go to the Soviet Union as a private citizen to sound out the prospects for developing relations. And the company directors chose prominent journalist Ivy Lee.

Moment of truth

Even before he took the trip, American newspapers began making sensational statements to the effect that Ivy Lee was "helping the Soviets" by trying to gain their diplomatic recognition. He did not view his mission as being so straightforward. Without hiding his antipathy for the Bolshevik system, the U.S. journalist believed that, despite the "export of revolution", Russia was vitally interested in economic cooperation with the West.

Ivy Lee's trip to Moscow was the result of the Rockefeller Company's desire to become involved in "big politics" and attract attention to the problem of relations with the USSR. And an impartial analysis of the political power structures and foreign and domestic policy of the Soviets was the best way to carry out this task. The American journalist described his impressions of the Soviet Union in two books published in the United States in 1927 and 1928 USSR: A World Enigma and Present-Day Russia. The first came out soon after his 10-day trip at the beginning of May 1927, and the second was an extended and supplemented version of the first.

Ivy Lee made it plain he was not speaking for any American organization, particularly the government. "My sole purpose, I stated, was to regard the situation 'objectively' (which is a word the Russians love), and that I wanted primarily to see people rather than thingsAbove all I wanted to see responsible representatives of the Government or the Communist Party, who would be in a position to give me candidly their own personal interpretation of the philosophy underlying their regime, and their point of view as to their own situation and its relationship with the rest of the world." He was particularly interested in communist propaganda - how it was organized, who directed it, did any united government, communist party, or Communist International forces stand behind it, or was there any division of labor: the government is limited to economic issues, and enter into treaties with capitalists, whereas the Communist International carries out a struggle against these capitalists, and the party plays the role of a conductor.

Ivy Lee also focused his attention on "the other Russia", the life of which went on behind the walls of the palaces and bureaucrats' offices (he went to Russia for the first time in 1905), and the second edition of the book was supplemented with a description of the family, marriage, and the system for bringing up children in the Soviet Union. Then he focused his attention on the Bolshevik dictatorship, which was alien to the Russian people and its culture and gave refuge to an even more malicious force - without homeland and a feeling of patriotism - the Communist International.

Ivy Lee met with head of the Soviet government, Chairman of the USSR, Council of People's Commissars Alexey Rykov (1881-1938), major party journalist Karl Radek (1880-1936), Chairman of the All-Union Central Council of Trade Unions Mikhail Tomsky (1885-1939), and heads of the People's Commissariat for Foreign Affairs. He did not see Joseph Stalin (or was not received by him), but mentioned him as an outstanding party organizer, that is, the main representative of that force which actually governs the country. The U.S. journalist gave an assessment of Lev Trotsky and Nikolay Bukharin based on their statements in the press, extensive quotes from which he gave in his book. Ivy Lee did not predict the rapid fall of those politicians he socialized with, but detected the lack of unity in the Soviet leadership. He distinguished the radical Bolshevik internationalists, the advocates of the proletariat's dictatorship, from the nationalist-minded Bolsheviks, whom he considered pragmatists. He saw Stalin as a proponent of reliance on peasants, and he considered Bukharin the most dangerous radical for the world community, citing his inflammatory speeches in the Communist International.

Ivy Lee was well aware that the slogans of "down with imperialism!", "proletarians of all countries, unite!", "factories to the workers!", and so on, did not pose a real threat to America and the Western world. The strongest antidote was the high standard of living in the West. But emissaries of the Communist International were professional revolutionaries who took advantage of any difficulty in any country to carry out their insurgent activities and make contact with the local communists and leftist radicals. They were capable of fanning a revolution in the East and in colonies.

His talks with the members of the Soviet government did not lead to any agreement, but they clarified the positions of the sides. Ivy Lee said that the American people and government were well-disposed toward the Russian nation and its people as individuals, but the Russian government did not inspire trust due to its non-acceptance of private property and the non-payment of its past debts. Lee noted the Russian people's and government's friendly attitude toward the Americans, but what then was the explanation for the existence of the Communist International, the headquarters of which was in Moscow, with Russians making up the largest delegation? The answers he received boiled down to there being no instances of revolutionary statements by Russians and Communist Internationalists in the United States, while U.S. business was granted concessions and trade agreements to compensate for the unavoidable losses during the revolution on a mutually advantageous basis. Political parties and public organizations of every hue operate in every country of the world, they exist in the United States, England, and other countries.

Ivy Lee came away from his conversation with Mikhail Tomsky with two impressions: concessions are a special privilege granted to foreign capitalists by the Soviet state. It is the guarantor of the use of state property, but since concession enterprises are managed by capitalists, the working class will adopt every legal means of struggle to uphold their rights.

Quo vadis?

The American journalist took note of a key thought in Lev Trotsky's brochure: if clear signs of the economic fall of capitalism are not found in the West in the next few decades, the USSR will not be able to surpass it in terms of labor productivity and production quality. There is no point trying to catch up with an express on a freight train, and the Bolsheviks will have to admit that their socialistic experiment based on the Marxist theory proved to be a fatal mistake. Ivy Lee did not have any doubt that despite the Western civilization's shortcomings, capitalism would win the race, and the Soviet system would be adjusting itself to capitalism, borrow its achievements, and return to it in the end.

As for diplomatic relations with the United States, the USSR was obliged to fulfill several preliminary conditions. It had to earn respect of the world community by fulfilling all of its international obligations, even to the capitalists, and exile all organizations calling for a coup in other countries. "The Russian people as a people are all right. The great enemy of mankind is the Communist International. The supreme problem is how to drive a wedge between the Communist International and the Russian people so that the Russian people themselves will come to feel that they want none of the International or its works."

The author represented his ideas as his own personal thoughts and even published his first book privately. Nevertheless, in the United States he was inundated with accusations, he was supposedly conducting the Reds' policy and had been bought by them. And the Soviets were not wild about his book either. Member of the Politburo's American commission Lev Khinchuk called it timely and important as an expression of the opinion of business circles, but found the conditions put forward unacceptable.

In the 1928 edition, there is a chapter called "Trade relations", which is not in the first book, and it begins with the words: "Clearly the time has not yet arrived for the United States to recognize the Soviet Government. It would be neither politically possible nor practically wise." Lee added settling relations with France and England to the conditions, which the Soviets should primarily accept. "A country that cannot live in accord with its near neighbors can hardly expect an understanding with distant countries." The Soviet Union needs time to implement these conditions, if it indeed accepts them. As for the United States, it has already taken its first step by legalizing trade relations with it.

Ivy Lee made two more visits to the USSR and lived to see the establishment of diplomatic relations, although not in accordance with his scenario. As Business Week put it, he was more worried about something else, that Russia, after steering a course toward industrialization and collectivization, not become totally isolated from the world community. The Russians turned from the ideas of the internationalists to their domestic affairs and realized that they would soon become economically independent and could manage without the United States, he said. He gave his own government just one piece of advice to develop relations with Russia so that when it saw the achievements of other countries, it would gradually and voluntarily renounce socialism and communism. This is what he suggested for solving "the world mystery", and Ivy Lee's prophecy came true many years later.




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Oil of Russia, No. 4, 2006
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