Socialism, Revolution and Capitalist Dialectics

While Schiff was a well-known and generous financial patron to Jewish humanitarian causes, and part of his support for revolutionary movements against the Czar can be explained by the pervasive anti-Semitism in Russia, Schiff was also acting as a capitalist in funding the revolutionary movement, as explained in a letter to The Evening Post:

Replying to your request for my opinion of the effects of the revolution upon Russia’s finances, I am quite convinced that with the certainty of the development of the country’s enormous resources, which, with the shackles removed from a great people, will follow present events, Russia will before long take rank financially amongst the most favored nations in the money markets of the world.[19]

Here Schiff is clearly reflecting the hopes of an international financier in seeing Russia brought from an anachronistic economy into a modern financial system.

Schiff’s reply reflected the general attitude of London and New York financial circles at the time of the revolution. John B Young of the National City Bank, who had been in Russia in 1916 in regard to a U.S. loan, stated in 1917 of the revolution that it has been discussed widely when he had been in Russia the previous year. He regarded those involved as “solid, responsible and conservative.”[20] In the same issue, The New York Times reported that there had been a rise in Russian exchange transactions in London 24 hours preceding the revolution, and that London had known of the revolution prior to New York. The article reported that most prominent financial and business leaders in London and New York had a positive view of the revolution.[21] Another report states that while there had been some disquiet about the revolution, “this news was by no means unwelcome in more important banking circles.” [22]

While these attitudes refer to the March Revolution, the November Bolshevik Revolution also had as many proponents among Big Business, who saw the Bolsheviks as providing the stability and economic development that the Kerensky regime could not provide. We have already considered the recommendations of William Sands of American Interventional. Two well-placed individuals from widely divergent backgrounds arrived at similar conclusions in regard to pro-Bolshevik attitudes among certain business interests: American labor leader Samuel Gompers, and conservative editor of The London Times, Henry Wickham Steed.

In 1922, The New York Times reported that Gompers, reacting to negotiations at the international economic conference at Genoa, declared that a group of “predatory international financiers” were working for the recognition of the Bolshevik regime for the opening up of resources for exploitation. Despite the rhetoric by New York and London bankers during the war that a Russian revolution would serve the Allied cause against Germany, Gompers noted that this was an “Anglo-American-German banking group” and that they were “international bankers” that did not owe any national allegiance. He also noted that prominent Americans who had a history of anti-labor attitudes were advocating recognition of the Bolshevik regime.[23]

Similarly, Henry Wickham Steed, in a first-hand account of the Paris Peace Conference of 1919, stated that proceedings were interrupted by the return from Moscow of William C. Bullitt and Lincoln Steffens, “who had been sent to Russia towards the middle of February by Colonel House and Mr. Lansing, for the purpose of studying conditions, political and economic, therein for the benefit of the American Commissioners plenipotentiary to negotiate peace.” Steed states specifically and at some length that international finance was behind the move for recognition of the Bolshevik regime and other moves in favor of the Bolsheviks, and specifically identified Jacob Schiff of Kuhn, Loeb & Co., New York, as one of the principal bankers “eager to secure recognition”: “Potent international financial interests were at work in favor of the immediate recognition of the Bolshevists….”[24]

Big Business had in fact gone into Russia in the midst of the revolutionary upheaval in 1917 to examine what business opportunities the Bolsheviks might provide at a time when a Bolshevik triumph was far from certain. This was undertaken under cover of the so-called American Red Cross Mission led by Col. William Boyce Thompson, director of the New York Federal Reserve Bank, among other interests. The Mission was funded mainly by Thompson and by International Harvester, which gave $200,000. The so-called Red Cross Mission was primarily comprised of business personnel, and was according to Thompson’s assistant, Cornelius Kelleher, “nothing but a mask” for business interests.[25] Of the 24 members of the Red Cross Mission, five were doctors and there were two medical researchers. The rest were lawyers and businessmen associated with Wall Street. Dr. Billings nominally headed the Mission.[26] Sutton states that the Red Cross Mission provided aid for the assistance of the revolutionaries: “We know from the files of the U.S. embassy in Petrograd that the U.S. Red Cross gave 4,000 roubles to Prince Lvoff, president of the Council of Ministers, for ‘relief of revolutionists’ and 10,000 roubles in two payments to Kerensky for ‘relief of political refugees.'”[27]

Such was Thompson’s enthusiasm for Bolshevism that he was affectionately nicknamed “the Bolshevik of Wall Street” among the denizens of the New York financial district. Thompson gave a lengthy interview with The New York Times just after his four-month tour with the American Red Cross Mission, lauding the Bolsheviks. The article is an interesting indication of how Wall Street viewed their supposedly “deadly enemies,” the Bolsheviks, at a time during which the Soviets were still far from secure. “His opinion was that Russia needs America, that America must stand by Russia,” states The New York Times, which further states:

Colonel Thompson is a banker and a capitalist, and he has large manufacturing interests. He is not a sentimentalist nor a “radical.” But he has come back from his official visit to Russia in absolute sympathy with the Russian democracy as represented by the Bolsheviki at present.[28]

While Thompson did not consider Bolshevism the final form of government, he did see it as the most promising step towards a “representative government” and that it was the “duty” of the USA to “sympathize” with and “aid” Russia “through her days of crisis.” He stated that in reply to surprise at his pro-Bolshevik sentiments he did not mind being called “red” if that meant sympathy for 1,70,000,000 people “struggling for liberty and fair living.” Thompson, like Sands, praised the Bolshevik Government as being the equivalent to America’s democracy, stating: “The present government in Russia is a government of workingmen. It is a Government by the majority, and, because our Government is a government of the majority, I don’t see how we can fail to support the Government of Russia.”

Thompson in what might be seen as a dialectical outlook, saw the prospects of the Bolshevik Government being transformed as it incorporated a more Centrist position and included employers. If Bolshevism did not proceed thus, then “God help the world,” warned Thompson. The Times article ends: “At home in New York, the Colonel has received the good-natured title of ‘the Bolshevik of Wall Street.'”[29]

It can be seen that Thompson regarded the Bolshevik revolution as part of a phase, rather than an end, that would hopefully develop into a new synthesis. As history transpired less than a decade later, the new synthesis that did emerge under Stalin was something different from that hoped for by the kind of business interests represented by Thompson, Sanders, Vanderlip, et al; despite the renewed optimism that was monetarily encouraged by the Allied alliance with Stalin during World War II, which turned out from Stalin’s perspective to be strictly a marriage of convenience and limited duration.