However, progress in Berlin proved to be slow, and the next RCP(b) Politburo resolution emphasized that: “a) In the matter of real implementation of concession agreements based on negotiations broadly underway in Berlin, nothing has yet been undertaken; b) The Concession Committee, jointly with Comrade Kursk, is directed to review the procedure for approval of concession agreements; c) Oil concessions with the Deutsche Bank, and Kryvyi Rih ore and agricultural concessions with Krupp, are deemed possible in principle, and it is recommend that the Concession Committee hear the reports of Comrades Stomonyakov and Krasin as soon as possible and move the matter forward on an expedited basis, before the Genoa Conference.”33
It the opinion of the Soviet Russian leadership, it was precisely these oil concessions that would be the most “tasty” Russian proposal offered to the Entente countries at the upcoming international conference in Genoa in the spring of 1922.
The Russian Oil Question at the Genoa and Hague Conferences
In the early 1920s, Western oil entrepreneurs behaved as if they were certain that Soviet rule in Russia was just a temporary phenomenon. Even after the city of Grozny was captured by the Red Army, French financial groups founded the Société des Pétroles Essences, Naphtes joint-stock company in Paris on April 2, 1920. The company “acquired” parcels in Grozny that had previously belonged to the entrepreneur Chermoyev, as well as a controlling interest in the New Caucasian Oilfield Company. French specialists believed these parcels should yield up to 9.6 million barrels of crude per year.
In 1920, another company intending to pump oil from Grozny was founded in Antwerp: the French-Belgian Trust Franco-Beige de Pétrole joint-stock company. The company hoped to obtain up to 7.2 million barrels of crude per year in Grozny. Thus, all Grozny crude had “owners” in the West, and it was their opinion that this crude absolutely could not be sold on foreign markets by the Soviet government. The Franco-Belgians, who had also founded the Société-d’Emba Grosny company in that same year of 1920, also held stock in companies producing oil on the Emba. Moreover, the emigrant Chermoyev, together with Trust Franco-Beige de Pétrole, founded the Société pour le Transport du Naphte de Grosny in Paris in 1921 to transport Grozny crude via Novorossiysk and contracted with the “lawful owners” of the Vladikavkaz Railroad, who were residing in the West and had granted exclusive rights to build an oil pipeline along the railroad bed.
Accordingly, the West came to regard the Grozny and Emba oil fields as Franco-Belgian, and most of the fields on the Absheron Peninsula as English property, and this was the position promulgated and taken up among the West in preparation for an international conference in Genoa, which was to resolve the complex issues of the postwar economic system in Europe.
On April 10, 1922, an international conference of representatives from both the winning and losing countries of the First World War opened in the Italian port city of Genoa. This conference was intended to finally close the books on the recently concluded war and work out steps for Europe’s political and economic recovery. The participants included 29 nations and five dominions of Great Britain; the US declined to participate and was represented by only a single observer. Soviet Russia also sent a delegation, which was difficult to assign clearly to any of these groups.
At a preliminary meeting in Boulogne, France on February 25, 1922, British Prime Minister David Lloyd George (1868–1945) and French Prime Minister Raymond Poincaré (1860–1934) agreed that the main issue at the conference would be the “Russian question.” A special committee of experts, who worked in London from March 20 to 28, 1922, prepared a draft resolution in which Soviet Russia would be required to acknowledge all debts and financial obligations of all former Russian authorities, and to assume responsibility for all losses due to the actions of both the Soviet and preceding governments or local authorities. According to this draft, all loans concluded with Russia after August 1, 1914 were to be considered paid after payment of a certain sum yet to be determined, and all nationalized enterprises were to be returned to their foreign owners.
In its turn, the government of Soviet Russia carried out a series of important organizational and political preparations. To ensure the complete diplomatic unity of the Soviet republics, a protocol was signed in Moscow on February 22, 1922 granting the RSFSR the power to defend the rights of the Union republics (Ukraine, Belorussia, Georgia, Armenia, Azerbaijan, the Buxoro [Bukhara] and Khorezm Republics, and the Far Eastern Republic) at the Genoa Conference, and to execute and sign documents and certain international treaties and agreements developed at the conference on their behalf. A protocol was then signed in Riga on March 30, 1922 at a special conference of representatives of the RSFSR, Estonia, Latvia, and Poland dedicated to coordinating the actions of the delegates of these states at the Genoa Conference, in which the delegates of Estonia, Latvia, and Poland expressed the opinion that the Soviet Russian government had to be recognized de jure.
In addition, the RSFSR Council of People’s Commissars decided to create a special commission to calculate the debts of the tsarist and provisional governments and compute the losses inflicted on the Russian economy during the years of the anti-Soviet imperialist intervention of 1917–1922. As it turned out, Russia’s debts totaled 18.496 billion gold rubles, while the losses inflicted on the country’s economy were 39 billion gold rubles.
A speech given at the first session of the Genoa conference by RSFSR People’s Commissar for Foreign Affairs Georgy Chicherin (1872–1936) contained a proposal for broad economic, political, and cultural cooperation between capitalist and socialist countries, noninterference in internal affairs, recognition of the principles of nonaggression, full equality, and mutual benefit, as well as resolution of all conflicts by peaceful means, economic cooperation, and development of trade relations. The program set forth by the representatives of the Soviet state met the fundamental interests of the peoples of all countries, and was aimed at establishing world peace. The Soviet government was prepared to accept the prewar debts and preferential right of most owners to receive the property that had previously belonged to them via concession or lease, provided the Soviet state received de jure recognition and was granted financial aid, and its war debts and interest thereon were forgiven.
A proposal submitted by the Soviet delegation for universal arms reduction was very important. People’s Commissar Chicherin declared the readiness of the Soviet state to support all attempts aimed at eliminating the threat of new wars. But the Soviet delegation’s call for disarmament caused confusion among the conference delegates. French representative Jean Louis Barthou even spoke openly against the proposal, although the delegations of other powers, concerned about public opinion, refrained from making similar sharp comments.
In response, a resolution of allied delegations was announced on April 15, 1922 and contained the following requirements for Soviet Russia: “1. The allied creditor states represented in Genoa cannot accept any obligations regarding claims made by the Soviet government. 2. However, in view of Russia’s severe economic state, the creditor states are inclined to reduce Russia’s war debt to them in percentage terms, the amounts of which are to be determined later. The nations represented at Genoa are inclined to take under consideration not only the question of deferred payment of current interest, but also of deferred payment of some overdue or delinquent interest. 3. Nevertheless, it must be finally established that no exceptions can be made for the Soviet government regarding: a) debts and financial obligations assumed to citizens of other nationalities; b) regarding the rights of these citizens to restoration of their property rights or to compensation for the damages and losses they have suffered.”