The themes linked to Lenin, money, and revolution present an inexhaustible source of inquiry for historians, psychologists, and satirists. Just imagine: we have a man who, after the complete victory of communism, urged that toilet bowls in public restrooms be made of solid gold; a man who never had to earn a living through hard work; a man who was comfortably off even in prison and exile, and barely knew what money was, yet at the same time made a considerable contribution to the theory of commodity-money relations.
How exactly did he manage to do that? Not through brochures and articles, of course, but through his revolutionary activities. It was Lenin who, between 1919 and 1921, introduced non-monetary “natural” barter between towns and the countryside. This led to the total collapse of the economy, a complete standstill in agriculture, mass famines, and, consequently, mass uprisings against the regime of the Russian Communist Party. Only then, just before his death, did Lenin perceive the true meaning of money and introduce the NEP (New Economic Policy), a kind of “manageable capitalism” under the supervision of the Communist Party.
How exactly did he manage to do that? Not through brochures and articles, of course, but through his revolutionary activities. It was Lenin who, between 1919 and 1921, introduced non-monetary “natural” barter between towns and the countryside. This led to the total collapse of the economy, a complete standstill in agriculture, mass famines, and, consequently, mass uprisings against the regime of the Russian Communist Party. Only then, just before his death, did Lenin perceive the true meaning of money and introduce the NEP (New Economic Policy), a kind of “manageable capitalism” under the supervision of the Communist Party.
However, our purpose here is not to explore these fascinating subjects, but to investigate where Vladimir Lenin got the enormous sums necessary to fund party activities before the revolution. Over recent decades, some very interesting materials have been published, but much remains obscure. For example, at the beginning of the 20th century, the underground newspaper 'Iskra' was funded by a mysterious benefactor (individual or collective), disguised in party documents as the “Californian gold mines.” Some researchers believe this was an instance of radical Russian revolutionaries being sponsored by American Jewish bankers, mostly Russian expatriates and their descendants, who hated Tsarism for its official anti-Semitic policies.
During the revolution of 1905-07, the Bolsheviks were funded by American oil corporations aiming to push their rivals out of the world markets (specifically, Nobel’s oil cartel in Baku). At that time, American banker Jacob Schiff also provided money to the Bolsheviks, as he himself confessed. Other donors included Yermasov, a manufacturer from Syzran, and Morozov, a merchant and industrialist near Moscow. Later, the Bolshevik party gained another financial supporter in Schmidt, the owner of a furniture factory in Moscow. It is curious that both Savva Morozov and Nikolai Schmidt eventually committed suicide, allowing the Bolsheviks to inherit a considerable portion of their fortunes. Of course, large sums also came from the so-called “ex’es” (a truncated form of “expropriation”), or, in simpler terms, bank robberies, post office heists, and railway ticket-office hold-ups. These actions were masterminded by two characters with criminal monickers: Kamo and Koba, i.e., Ter-Petrosian and Dzhugashvili.
Nevertheless, hundreds of thousands, and even millions, of rubles invested in revolutionary activities could at best only shake the Russian Empire. Despite its shortcomings, the empire’s institutions were relatively solid—at least in peacetime. With the outbreak of World War I, however, new financial and political opportunities opened up for the Bolsheviks, and they didn’t fail to take advantage of them. On January 15, 1915, the German ambassador in Istanbul sent a report to Berlin regarding his meeting with Russian subject Aleksander Gelfand (aka Parvus), an active participant in the 1905-07 revolution and owner of a large trade company. Parvus revealed his plan for the Russian revolution and was immediately invited to Berlin, where he met with influential members of the German cabinet and advisors to Chancellor Bethmann-Hollweg. Parvus suggested that the Germans provide him with a large sum of money to help promote, first, the national movements in Finland and Ukraine, and second, to support the Bolsheviks, who advocated for the defeat of the Russian Empire in the unjust war in order to overthrow the “regime of landlords and capitalists.” The Germans accepted his proposal and, by Kaiser Wilhelm’s personal order, gave him two million German marks as the first contribution to “the cause of the Russian revolution.” Later, other installments followed, some of them for even larger sums. According to a receipt from Parvus, on January 29, 1915, he received 15 million Russian rubles for the development of the revolutionary movement in Russia. The money was allotted with typical German efficiency.
In Finland and Ukraine, Parvus’ (and the German general staff’s) agents turned out to be of secondary importance. Their influence on the independence movements in these countries was insignificant compared to the broader processes of nation-building in the Russian Empire. However, in regard to Lenin, Parvus hit the bull’s-eye. Parvus claimed that he told Lenin that, at that moment, revolution was only possible in Russia and only as a result of Germany winning the war. In response, Lenin sent his proxy Fuerstenberg (aka Ganetsky) for close cooperation with Parvus, which lasted until 1918. Another installment from Germany, although not as large, came to the Bolsheviks via Swiss parliamentarian Karl Moor—amounting to only $35,000. More investments came from the Nia Bank in Stockholm, which, on the order of the German Imperial Bank, opened personal accounts for Lenin, Trotsky, Zinoviev, and other Bolshevik leaders. Order No. 7433 of March 2, 1917, allocated funds for the “services” of Lenin, Zinoviev, Kollontai, and others in spreading public peace propaganda in Russia after the Tsarist regime had just been overthrown.
The enormous sums were wisely administered. The Bolsheviks published their own newspapers, which were distributed free of charge in every town and village. A network of professional propagandists covered the entire territory of Russia, and “Red Guard” units were formed openly. Of course, this was not done with German money alone. Although the “poor” political émigré Trotsky had $10,000 confiscated by Canadian customs in Halifax in 1917 while en route from America to Russia, it is clear that he still managed to smuggle vast sums from banker Jacob Schiff to his supporters.
Even greater funds were raised during the “expropriation of the expropriators” (in simpler terms, robbing the wealthy), initiated in the spring of 1917. Has it ever occurred to anyone to question the Bolsheviks' occupation of the palace of ballerina Kshesinskaya or the Smolny Institute?
The Russian democratic revolution broke out unexpectedly in early spring 1917 for all its political subjects, both inside and outside the empire. It was a spontaneous, grass-roots movement both in Petrograd and on the empire's outskirts. Lenin, who was in exile in Switzerland, had publicly doubted only a month earlier whether the politicians of his generation (those in their 40s and 50s) would live to see a revolution in Russia. However, it was the radical Russian politicians who were the quickest to change their ways and seize the opportunity, aided by German assistance.
All in all, the Russian revolution was not accidental. It is even strange that it did not break out a year earlier. The social, political, and national problems in the Romanov empire had reached their breaking point. From a formal economic perspective, industry was developing dynamically, and the stockpile of weapons and ammunition had increased considerably. Yet, the utter inefficiency of central power and the corruption of the elite—inevitable in any autocracy—took their toll. The deliberate corruption of the army, the undermining of the rear, the sabotage of any attempts to constructively address urgent problems, and the incurable chauvinistic centralism typical of virtually all Great Russian political forces exacerbated the crisis. During the 1917 campaign, Entente troops were supposed to launch a simultaneous general offensive on all European fronts, but the Russian army was unprepared. Consequently, in April, the Anglo-French forces at Rheims failed, with casualties exceeding 100,000 dead and wounded. In July, Russian troops attempted an offensive towards Lviv, but eventually had to retreat from Galicia and Bukovina, and nearly gave up Riga in the north without resistance. Finally, the Battle of Caporetto in October resulted in the disastrous defeat of the Italian army, with 130,000 Italians dead and another 300,000 taken prisoner. Only the English and French divisions, urgently shipped from France, stabilized the front and prevented Italy from withdrawing from the war. After the November uprising in Petrograd, when the Bolsheviks and Left Social Revolutionaries came to power, an armistice was declared on the Eastern front—first de facto and then de jure, with Russia, Ukraine, and Romania.
These changes on the Eastern front were largely made possible by funds allotted by Germany to demoralize the Russian army from the rear. The military operations on the Eastern front, prepared and executed with large-scale success, were considerably facilitated by undermining activities within Russia, conducted by the Ministry of Foreign Affairs. "Our chief goal in this activity was to further strengthen the nationalist and separatist sentiments, and support the revolutionary elements. We are continuing this activity even at present and completing an agreement with the political division of the General Staff in Berlin" (Captain von Huelsen).
"Our joint efforts have yielded considerable results. Without our constant support, the Bolshevist movement could never have reached the scale and influence it has now. Everything testifies to the further growth of this movement." These were the words of German Secretary of State Richard von Kuehlmann, written on September 29, 1917. A month and a half before the Bolshevik revolt in Petrograd, von Kuehlmann knew what he was talking about. He was an active participant in all those events; soon after, he would conduct peace negotiations with Bolshevik Russia and the Ukrainian People's Republic in Brest in early 1918. He controlled huge financial currents, amounting to tens of thousands of German marks, and had contacts with key figures in this historic drama. “I have the honor of asking Your Excellence to allot a sum of 15 million marks at the disposal of the Ministry of Foreign Affairs for political propaganda in Russia, referring to paragraph 6, section II of the extraordinary budget. Depending on the development of events, I would like to stipulate in advance the possibility of addressing Your Excellence again for additional funds,” von Kuehlmann wrote on November 9, 1917.
No sooner had news of the Petrograd revolt (soon to be labeled the Great October Revolution) arrived than Kaiser Germany allocated new funds for propaganda in Russia. This money went primarily to support the Bolsheviks, who first demoralized the army and then withdrew the Russian Republic from the war, freeing millions of German soldiers for operations in the West.
Despite all this, the Bolsheviks managed to maintain the image of unselfish revolutionaries and romantic Marxists until today. Even now, not only “official” adepts of the Marxist-Leninist creed but also some non-party left intellectuals remain convinced that Lenin and his followers were sincere internationalists and noble champions of the popular cause.
In 1958, Oxford University published secret documents from the German Ministry of Foreign Affairs (including von Kuehlmann’s telegrams) which proved the massive financial and organizational assistance provided by the German authorities to the Bolsheviks. Germany’s goals were clear: the radical revolutionaries were to undermine the military potential of one of the principal rivals of the Central Powers, i.e., the Russian Empire. Thousands of books have been published providing further convincing evidence. Yet, even today, many communist historians and some liberal researchers deny these self-evident historical facts. As German Secretary of State von Kuehlmann noted on December 3, 1917, “Only when the Bolsheviks began to receive constant investments from us via various channels and under various labels were they able to firmly establish their major printed organ, 'Pravda', develop active propaganda, and significantly enlarge their party base, which was rather narrow at the beginning.” Party membership grew a hundredfold within just a year after the overthrow of Tsarism.
Colonel Walter Nicolai, head of German military intelligence during World War I, described Lenin in his memoirs as follows: “Like anyone else at the time, I knew nothing about Bolshevism; as for Lenin, I only knew that he was living in Switzerland as a political émigré. Under the cryptonym ‘Ulianov,’ he provided my service with valuable information on the situation in Tsarist Russia against which he was fighting.”
In other words, without constant German assistance, the Bolsheviks would hardly have become one of the leading Russian parties in 1917. This would have meant a completely different development of events, probably much more anarchical, which would hardly have led to the establishment of a dictatorship, let alone a totalitarian regime. The most likely scenario would have been a different version of the disintegration of the Russian Empire, as World War I was primarily about the destruction of empires. The independence of Finland and Poland was effectively a fait accompli around 1916.
The Russian Empire, or even the Russian Republic, would likely have followed the same process of collapse triggered by World War I. Consider that Britain was forced to grant independence to Ireland, India was pushing for independence right after the war, and many other colonial territories followed suit. The revolution itself was, to some extent, marked by national-liberation struggles, as it was the Life Guards Volhynia Regiment that first rebelled against autocracy in early 1917. At that time, the Bolsheviks were a tiny party, barely known to anyone (with only about four thousand members, mostly in exile and emigration). They had no significant role in overthrowing Tsarism.
Assistance continued after Lenin’s government came to power. "You are free to operate large sums, as we are extremely interested in the stability of the Bolsheviks. You have Riesler’s funds at your disposal. If necessary, wire us how much more you need." (Berlin, May 18, 1918). Von Kuehlmann addressed the German embassy in Moscow, confirming the continuing German support for the Bolsheviks. The Bolsheviks held fast, and by the fall of 1918, they were channeling huge sums from the Russian imperial treasury into revolutionary propaganda in Germany, hoping to incite world revolution.
In Germany, a revolution did break out in early November 1918. Money, weapons, and qualified professional revolutionaries shipped from Moscow played their role. However, local communists failed to lead this revolution. Subjective and (more importantly) objective factors worked against them. A totalitarian regime was only established in Germany 15 years later, but that is a different story. Meanwhile, in 1921, the democratic Weimar Republic's renowned social democrat Eduard Bernstein published an article in his party's central organ 'Vorwärts' titled “A Shady Story,” in which he revealed that, as early as December 1917, he had received confirmation from “a certain competent person” that Germany had given money to Lenin. According to Bernstein, the Bolsheviks alone were paid more than 50 million German marks in gold. This sum was later officially mentioned in a session of the Reichstag's foreign policy committee. When the communist press accused Bernstein of libel, he invited them to sue him, which led to an immediate cessation of the campaign. Since Germany was in desperate need of friendly relations with Soviet Russia, the discussion of this topic in the press was abruptly shut down.
Aleksander Kerensky, one of the Bolsheviks’ main political opponents, concluded from his own investigation that the total sums received by the Bolsheviks before and after coming to power amounted to 80 million German marks in gold. In fact, Lenin never even tried to conceal this from his party colleagues. At a meeting of the All-Russian Central Executive Committee (a Bolshevik quasi-parliament) in November 1918, Lenin stated: “I am often accused of having carried out our revolution with German money; I do not deny it, but with Russian money, I am going to carry out the same revolution in Germany.” And he tried to do so, throwing away tens of millions of rubles. However, he failed: the German social democrats, unlike their Russian counterparts, quickly recognized the situation and arranged for the timely assassination of Karl Liebknecht and Rosa Luxemburg. This was followed by the disarmament of the “Red Guards” and the physical elimination of their leaders.
They had no other option. Perhaps, if Kerensky had found the courage to order the shooting of Smolny along with all its "red" inhabitants, even the Kaiser’s millions wouldn’t have helped them. We might round off here, were it not for a report from 'The New York Times' in April 1921, stating that in 1920 alone, 75 million Swiss francs were sent to Lenin’s account in a Swiss bank. According to the newspaper, Trotsky had $11 million and 90 million francs in his accounts; Zinoviev had 80 million francs; the “knight of the revolution,” Dzerzhinsky, had 80 million; and Ganetsky-Fuerstenberg had 60 million francs and 10 million dollars. Lenin, in his secret note to Cheka leaders Unschlicht and Bokiy on April 24, 1921, demanded they find the source of this information leak. However, it was never discovered.
Was this money also intended for the world revolution? Or was it some form of kickback from politicians and financiers in countries where Lenin and Trotsky’s “red horses” were not ordered to go? We can only speculate. Even now, a significant portion of Lenin’s papers remains top secret.
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See also:
Gary Allen and Larry Abraham (1971) - None Dare Call It Conspiracy.
Gary D. Best (1972) - Financing a Foreign War: Jacob H. Schiff and Japan, 1904–05.
Gary D. Best (1972) - Financing a Foreign War: Jacob H. Schiff and Japan, 1904–05.
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