The first volume of this study concluded that the Soviets employed more than 350 foreign concessions during the 1920s. These concessions, introduced into the Soviet Union under Lenin's New Economic Policy, enabled foreign entrepreneurs to establish business operations in the Soviet Union without gaining property rights. The Soviet intent was to introduce foreign capital and skills, and the objective was to establish concessions in all sectors of the economy and thereby introduce Western techniques into the dormant postrevolutionary Russian economy. The foreign entrepreneur hoped to make a normal business profit in these operations.
... In the Caucasus oil fields--then seen as the key to economic recovery by virtue of the foreign exchange that oil exports would generate—the International Barnsdall Corporation introduced American rotary drilling techniques and pumping technology. By the end of the 1920s 80 percent of Soviet oil drilling was conducted by the American rotary technique; there had been no rotary drilling at all in Russia at the time of the Revolution. International Barnsdall also introduced a technical revolution in oil pumping and electrification of oil fields. All refineries were built by foreign corporations, although only one, the Standard Oil lease at Batum, was under a concessionary arrangement—the remainder were built under contract. Numerous Type I and Type III technical-assistance concessions were granted in the coal, anthracite, and mining industries, including the largest concession, that of Lena Goldfields, Ltd., which operated some 13 distinct and widely separated industrial complexes by the late 1920s. In sectors such as iron and steel, and particularly in the machinery and electrical equipment manufacturing sectors, numerous agreements were made between trusts and larger individual Tsarist-era plants and Western companies to start up and reequip the plants with the latest in Western technology. A.E.G., General Electric, and Metropolitan-Vickers were the major operators in the machinery sectors. Only in the agricultural sector was the concession a failure.
... In other words, in only one sector was there no evidence of Western technological assistance received at some point during the 1920s. The agreements were made either with dominant trusts or with larger individual plants, but as each sector at the outset comprised only a few large units bequeathed by the Tsarist industrial structure, it was found that the skills transferred were easily diffused within a sector and then supplemented by imported equipment. Examination of reports by Western engineers concerning individual plants confirmed that restarting after the Revolution and technical progress during the decade were dependent on Western assistance.
It was therefore concluded that the technical transfer aspect of the New Economic Policy was successful. It enabled foreign entrepreneurs and firms to enter the Soviet Union. From a production of almost zero in 1922 there was a recovery to pre-World War I production figures by 1928. There is no question that the turn-around in Soviet economic fortunes in 1922 is to be !inked to German technical assistance, particularly that forthcoming after the Treaty of Rapallo in April 1922 (although this assistance was foreseeable as early as 1917 when the Germans financed the Revolution). ...
It was concluded that for the period 1917 to 1930 Western assistance in various forms was the single most important factor first in the sheer survival of the Soviet regime and secondly in industrial progress to prerevolutionary levels. ...
... The general design and supervision of construction, and much of the supply of equipment for the gigantic plants built between 1929 and 1933 was provided by Albert Kahn, Inc., of Detroit, the then most famous of U.S. industrial architectural firm. No large unit of the construction program in those years was without foreign technical assistance, and because Soviet machine tool production then was limited to the most elementary types, all production equipment in these plants was foreign. ...
Published data on the Soviet "Plans" neglect to mention a fundamental feature of the Soviet industrial structure in this period: the giant units were built by foreign companies at the very beginning of the 1930s, and the remainder of the decade was devoted to bringing these giants into full production and building satellite assembly and input-supply plants. In sectors such as oil refining and aircraft, where further construction was undertaken at the end of the decade, we find a dozen top U.S. companies (McKee, Lummus, Universal Oil Products, etc.) aiding in the oil-refining sector and other top U.S. aircraft builders in the aircraft sector (Douglas, Vultee, Curtiss-Wright, etc.).
Only relatively insignificant Soviet innovation occurred in this period: SK-B synthetic rubber, dropped in favor of more useful foreign types after World War II; the Ramzin once-through boiler, confined to small sizes; the turbodrill; and a few aircraft and machine gun designs....
... At about the same time [1917-20] American businessmen were instrumental in aiding the formation of the Soviet Bureau, and several hundred firms had their names on the file in the bureau when it was raided in 1918...
The German Government financed the Bolshevik Revolution ... The German support was largely replaced in the late 1920s by American technical assistance, but until the mid-1930s the Germans were still arming the Soviets. ...
The Soviet Union has a fundamental problem. In blunt terms, the Soviet economy, centrally planned under guidance of the Communist Party, does not constitute a viable economic system. The system cannot develop technically across a board front without outside assistance...
Examples of continuing Western assistance include the means to build the First Five Year Plan and models for subsequent duplication.
