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Armand Hammer, Lenin, and the First American Concession in Soviet Russia

Published online by Cambridge University Press:  27 January 2017

Philip S. Gillette
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Abstract

In 1921 a young American doctor named Armand Hammer went to Russia, met Lenin, and undertook the first American concession in Soviet Russia. Interest in this episode has been heightened by the fact that fifty years later Armand Hammer, as chairman of the Occidental Petroleum Corporation, forged new commercial links between the United States and the Soviet Union. This article provides a new interpretation of Hammer’s meeting with Lenin and his receipt of the first American concession granted by the Soviet government. It throws light on how Soviet national security objectives and personal relations can influence Soviet government decisions on American trade.

Type
Articles
Information
Slavic Review , Volume 40 , Issue 3 , Fall 1981 , pp. 355 - 365
Copyright
Copyright © Association for Slavic, East European, and Eurasian Studies. 1981

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References

1. Hammer made two agreements with the Soviet authorities in 1921—one regarding a barter of American grain for Soviet goods and the other concerning an asbestos concession in the Urals. This article focuses on the concession.

2. Armand, Hammer, The Quest of the Romanoff Treasure (New York: Farquhar Payson, 1932 Google Scholar).

3. Louis, Fischer, The Life of Lenin (New York: Harper and Row, 1964), p. 558 Google Scholar, note 5.

4. Bob, Considine, The Remarkable Life of Dr. Armand Hammer (New York: Harper and Row, 1975 Google Scholar); Lucy Jarvis, producer, “The Russian Connection: Dr. Armand Hammer, “National Broadcasting Company, June 18, 1974; Daniel Yergin, “The One-Man Flying Multinational: Armand Hammer Wheels and Deals,” Atlantic. 235. no. 6 (June 1975); 31-3. Cf. Geoffrey T., Hellman, “Profiles: The Innocents Abroad” New Yorker, December 23, 1933, pp. 18–21Google Scholar.

5. Hammer, Quest, p. 3.

6. Ibid., pp. 64 and 66.

7. Ibid., p. 84.

8. In 1973 I sought to interview Armand Hammer in order to clear up several questions. Since he was unable at the time to grant the interview, 1 have reconstructed the events without his assistance. On July 18,1980,1 wrote to Hammer seeking clarification of these matters, but received no reply (author to Hammer, December 4, 10, and 19, 1973 and Hammer to author, January 7, 1974; author to Hammer, July 18, 1980).

9. For Julius Hammer (1874-1948), see the biographies of Armand cited in note 4; see also the obituary of Julius, Hammer, New York Times, October 20, 1948, p. 29 Google Scholar. Armand apparently claimed that Julius had met Lenin at Stuttgart in 1907 and that Julius in 1921 had written a private letter to Lenin, which he entrusted to Armand for delivery ( “Lenin i pervaia kontsessiia,” Krasnaiagazeta [Leningrad], January 21, 1926, no. 2360; Daily People [New York], August 20, 1907, p. 1).

10. The group's formal name was “The Left Wing Section of the Greater New York Locals of the Socialist Party.” See Theodore, Draper, The Roots of American Communism (New York: The Viking Press, 1957), pp. 145 and 422Google Scholar, note 43; Gitlow, Benjamin, Confess: The Truth About American Communism (New York: E. P. Dutton and Co., 1939), pp. 28–29, 59, 118–19Google Scholar. See also National Archives, Department of State, General Records, 701.6111 / 315, Martens to Secretary of State, April 22, 1919 and ibid., 661.116/16, Julius Hammer to Stevens and Co., July 19, 1919.

11. Convicted in June 1920, Julius entered Sing Sing state penitentiary in September 1920 and was released on parole in January 1923 (see “The People vs. Julius Hammer,” printed transcript, Supreme Court of the State of New York, Bronx County, Ind. #473/19, Cal. #323/1919, p. 6a; Considine, Remarkable Life, pp. 10-12; Gitlow, , Confess, pp. 118–19Google Scholar; Yergin, “One-Man Flying Multinational,” p. 36).

12. Lenin to Central Committee of the Russian Communist Party (Bolshevik), October 14,1921, in Lenin, V. I., Polnoe sobranie sochinenii, 5th ed., 55 vols. (Moscow, 1958-65), 53:257 Google Scholar (hereafter cited as PSS); Lenin's emphasis.

13. Lenin to Hammer, November 3, 1921, in English, photocopy published in Krasnaia gazeta, January 21, 1926, no. 2360. Although 1 have made minor adjustments in the orthography, 1 have reproduced the words in exact order. The three others to whom Lenin referred—James Larkin, Charles Ruthenberg, and Isaac E. Ferguson—were Communists. Unlike Julius, they had been convicted under the criminal anarchy laws of the state of New York. Like Julius, they were currently incarcerated in Sing Sing state penitentiary (see Draper, , Roots of American Communism; Fund for the Republic, Digest of the Public Record of Communism in the United States [New York: Fund for the Republic, Inc., 1955 Google Scholar]; Gitlow, , Confess; Irving Howe and Lewis Coser, The American Communist Party: A Critical History [1919-1957] [Boston: Beacon Press, 1957 Google Scholar]; Emmet, Larkin, James Larkin: Irish Labor Leader, 1876- 1947 [Cambridge, Mass.: MIT Press, 1965 Google Scholar]).

14. Hammer, Quest, pp. 76-77. The paragraph also appears in the printed text of the note in Lenin, V. I., Collected Works, 4th ed., 45 vols. (London and Moscow: Laurence and Wishart, Progress Books, 1970), 45:482 Google Scholar. It also appears in a Russian translation of the note in Lenin, PSS, 53:324.

15. Hammer, Quest, pp. 27,31 -32,37-38,69-70. After Martens's departure in January 1921, Recht was authorized to conduct business in his behalf (see obituary of Charles, Recht, New York Times, July 17, 1965, p. 25 Google Scholar).

16. Gitlow also names the Finnish Communist Santeri Nuorteva as a principal adviser to Martens ( Gitlow, , Confess, pp. 28–29Google Scholar). For Weinstein, see Hullinger, Edwin Ware, The Reforging of Russia (New York: E. P. Dutton and Co., 1925), p. 128 Google Scholar; U.S. Senate, Committee on Foreign Relations, Subcommittee, Hearings, on S. Res. 263, Russian Propaganda, 66th Congress, 2nd Session (Washington, D.C.: U.S. Government Printing Office, 1920), pp. 41-43 (hereafter cited as Russian Propaganda).

17. Hammer, Quest, pp. 2, 6-7, 42, 49, 52-53. For Ludwig C. A. K. Martens (1875-1948), see Evgen'ev, G. and Shapik, B., Revoliulsioner, diplomat, uchenyi (o L. K. Martense) (Moscow, 1960 Google Scholar); Russian Propaganda, pp. 7-27.

18. See Gitlow, , Confess, pp. 28–29Google Scholar and Considine, Remarkable Life, p. 10. In July 1920, Martens wrote to Foreign Trade Commissar Leonid Krasin: “Despite all our efforts, we succeeded in dispatching cargoes totaling only $200,000, received on credit” (quoted in M. E. Sonkin, Okno vo vneshnii mir. Ekonomicheskie sviazi Sovetskogo gosudarstva v 1917-1921 gg. [Moscow, 1964], p. 51). In February 1921, Martens told an Izvestiia correspondent: “In fact we failed to trade with America; nevertheless, we managed to export somehow: thus, various goods worth $750,000, mainly drugs, are already reaching Moscow” (V. Mikhels, “Sovetskaia missiia v Amerike [beseda s tov. Martensem],” Izvestiia, February 24, 1921). See also an interview with Martens, “Pervaia kontsessiia,” Ekonomicheskaia zhizn', November 2, 1921.

19. For Boris Reinstein (1866-1947), see Lazitch, Branko and Drachkovitch, Milorad M., Biographical Dictionary of the Comintern, Hoover Institution Publication no. 121 (Stanford: Hoover Institution Press, 1973), pp. 336–37Google Scholar; Draper, , Roots of American Communism, pp. 148–49, 151, 356, 363-64Google Scholar. Like Reinstein, Julius Hammer had been a druggist before becoming a physician. Reinstein's wife, Anna, was a doctor, and the Reinsteins’ two children were doctors. For Stuttgart, see Daily People, August 20, 1907. For the testimonial meeting, see Weekly People (New York), May 5, 1917. It seems likely that Reinstein knew Armand in America. This would explain why Lenin stated that Reinstein knew Armand “personally” (see Lenin to A. I. Rykov, April 5, 1922 [Lenin, PSS, 54:225-26]).

20. Lenin to Central Committee of the Russian Communist Party (Bolshevik), October 14, 1921 (Lenin, PSS, 53:257).

21. Lenin to Hammer, November 3, 1921 (Krasnaia gazeta, January 21, 1926, no. 2360).

22. Hammer, Quest, pp. 62-68.

23. For example, in 1917 Lenin wrote: “The U.S.A. is unrivaled either in the rate of development of capitalism at the turn of the century, or in the record level of capitalist development already attained; nor has it any rival in the vastness of territory developed with the use of the most up-to-date machinery; which is adapted to the remarkable variety of natural and historical conditions, or in the extent of the political liberty and the cultural level of the mass of the population” (see “New Data on the Laws Governing the Development of Capitalism in Agriculture,” in Lenin, V. I., Lenin on the United States: Selected Writings [New York: International Publishers, 1970], p. 115 Google Scholar). In 1918, Lenin told Albert Rhys Williams that Russia needed “thousands” of American engineers and scientists ( Williams, Albert Rhys, Journey into Revolution: Petrograd, 1917-1918 [Chicago: Quadrangle Books, 1969], p. 281 Google Scholar).

24. The Soviet government was at this time holding discussions with two prospective British concessionaires, Leslie Urquhart and Royal Dutch Shell (see Carr, Edward Hallett, The Bolshevik Revolution 1917-1923, vol. 3 [New York: Macmillan Company, 1953], pp. 354–55CrossRefGoogle Scholar). Lenin was interested in these negotiations (see Lenin to P. A. Bogdanov, October 28, 1921 [Lenin, PSS, 53:312]).

25. Lenin to Martens, October 15, 1921 (Leninskii sbornik, vol. 36 [Moscow, 1959], p. 337).

26. The group also included “Big” Bill Haywood and H, S. Calvert. A charter for the colony was signed on November 22, 1921. For Rutgers and the colony, see Lazitch, Branko and Drachkovitch, Milorad M., Lenin and the Comintern, vol. 1 (Stanford: Hoover Institution Press, 1972), pp. 145–47, 182–97Google Scholar; Draper, Roots of American Communism; Trincher, J. and Trincher, K., Rutgers (Moscow, 1967 Google Scholar).

27. Lenin to Martens, October 15, 1921 (Leninskii sbornik, 36:337).

28. Editor's note, Lenin to Chicherin, October 16, 1921 (ibid., 338-39).

29. Ulam, Adam B., Expansion and Coexistence: Soviet Foreign Policy 1917-73, 2nd ed. (New York: Praeger, 1974), p. 78 Google Scholar. Gaddis, John Lewis, Russia, the Soviet Union, and the United States: An Interpretive History (New York: John Wiley and Sons, Inc., 1978), pp. 88–93 Google Scholar.

30. In a related matter, Lenin on October 17, 1921 drafted a resolution on the creation of a single commission on concessions—which the Politburo passed on that day (see the editor's note in Lenin, PSS, 44:681); Trush, M. I., Vneshnepoliticheskaia deiatel'nost’ V. I. Lenina, 1921-1923, den’ za dnei (Moscow, 1967), p. 288 Google Scholar.

31. Lenin to Chicherin, October 16, 1921 (Leninskii sbornik, 36:338-39).

32. For the American relief effort, see Weissman, Benjamin M., Herbert Hoover and Famine Relief to Soviet Russia: 1921-1923 (Stanford: Hoover Institution Press, 1974 Google Scholar). For Lenin's vote on the Politburo resolution, see the editor's note in Lenin, PSS, 44:682.

33. Lenin to Hillman, October 13, 1921 ( Lenin, , Collected Works. 35:526–27Google Scholar).

34. Lenin to Mikhailov, October 28, 1921 (Leninskii sbornik, 36:352-53).

35. Lenin to Chicherin, October 22, 1921 (Lenin, PSS. 53:299); Lenin's emphasis.

36. Lenin to Martens, October 19, 1921 (Leninskii sbornik. 36:341); Lenin's emphasis.

37. “Pervaia kontsessiia,” Ekonomicheskaia zhizn', November 2, 1921.

38. Williams, Robert C., Russian Art and American Money 1900-1940 (Cambridge, Mass.: Harvard University Press, 1980), pp. 200–208 CrossRefGoogle Scholar.

39. “Pervaia kontsessiia,” Ekonomicheskaia zhizn', November 2, 1921.

40. Ibid. One unanswered question is what amount of new capital Hammer was obligated to invest. For discussion of this issue, see Williams, , Russian Art, p. 206 Google Scholar.

41. Confirmation of the annex's existence is provided by a summary of its contents made by the editors of Lenin, PSS, 53:44, note 368. For the text of the body of the contract, see SSSR, Ministerstvo inostrannykh del, Dokumenty vneshnei politiki SSSR (Moscow, 1957-), 4:465-71.

42. Hammer, Quest, pp. 81-82.

43. Lenin to Martens, October 27, 1921 (Lenin, PSS, 53:310).

44. Two Soviet sources state that the date of Armand Hammer's interview with Lenin was October 22, 1921 (seeTrush, Vneshnepolitkheskaiadeiatel'nost', p. 440 and Lenin, PSS, 44:683). It would seem that Martens and Hammer were negotiating the concession in Moscow as early as October 13 (see Lenin to Central Committee of the Russian Communist Party [Bolshevik], October 14, 1921 [Lenin, PSS, 53: 257]).

45. Lenin to Martens, October 27, 1921 (Lenin. PSS, 53:310).

46. Floyd J. Fithian, “American Business Participation in Russia, 1918-1933, “Ph.D.diss., University of Nebraska, 1964, pp. 87-111.

47. Lenin to Martens, October 27, 1921 (Lenin, PSS, 53:310). Telegram from Lenin to G. E. Zinov'ev or his deputy, May 11, 1922 (ibid., 44:254).

48. Lenin to Stalin, May 24, 1922, secret and urgent (Leninskii sbornik, 36:493-94); Lenin's emphasis.

49. Ibid., p. 494, note 2.

50. In the 1960s Hammer had tried unsuccessfully to obtain Soviet orders for chemical fertilizer plants. On the value of the Lenin connection in the 1970s, see Considine, , Remarkable Life, pp. 180–81Google Scholar, and Daniel Yergin, “The One-Man Flying Multinational: Armand Hammer Tries Harder,” Atlantic, 236, no. 1 (July 1975): 63-66. Soviet authorities have played up a bronze figurine of a monkey on Lenin's desk in the Lenin Museum which allegedly was a gift from Hammer (see, for example, I., Kashlev, Cultural Contacts Promote Peaceful Coexistence [Moscow, 1974], pp. 5–Google Scholar).

51. Armand Hammer, press conference, in Considine, , Remarkable Life, p. 180 Google Scholar.

52. Gaddis, , Russia, the Soviet Union, and the United States, pp. 88–Google Scholar. This is a revised version of a paper presented at the annual meeting of the Southwestern Social Science Association, Fort Worth, Texas, March 1979. The authors would like to thank Philip Stewart, Brian Silver, and the anonymous referees for their suggestions.