Great Depression – Great Omission
Cheap wheat from the Soviet Union flooded world markets in the autumn of 1930 and proved to be one of the most unreported but important causes of the Great Depression
Countdown to one of the major causes of the Great Depression:
Pre -WW1: Russia produced & sold over 25% of world’s wheat.
Post WW1: Russian wheat exports all but vanished in turmoil of revolutionary period.
America, Australia, Argentina & Canada responded to fill this gap and by the mid- 1920s there was more wheat available worldwide than was required.
American farmers were hit hard as they had been encouraged to expand their wheat production during WW1 and had taken out mortgage loans to finance this expansion.
By the end of the 1920s, they were campaigning for protectionist duties to safeguard their home market.
Germans help sow the seeds of one of the major causes of the Great Depression
1922 Krupp, the German armaments manufacturer, set up a huge 50,000 hectare farm in the North Caucasus for Vladimir Lenin (leader of Russia in its new guise as the Soviet Union) in return for Lenin allowing German troops to train, illicitly, on Soviet soil.
1928 Krupp became involved with Lenin’s successor, Joseph Stalin, in the creation of more giant farms to grow wheat for export, so that Stalin could obtain hard currency to buy German armaments.
Stalin exploited this opportunity to take revenge on his kulak peasants (relatively well-off farmers) who were driven off their farms and deported to the arctic wastes of Siberia, while he forced their former employees to work, in effect, as slave labour.
The Great Depression arrived with a vengeance
Autumn 1930: Soviet wheat deluged onto unsuspecting, already overprovided and frankly horrified world markets at slave-labour prices.
Stalin had the audacity to claim that his ability to export wheat at such a low price was a reflection of the superiority of the Communist economic model over that of the Capitalist one.
How the legend of the American ‘Dust Bowl’ began
The US government, unaware that farm-workers were treated like slaves in the Soviet Union, decided to blame its own farmers for their inability to compete on the price of wheat.
It claimed its farmers had mismanaged their soil: thus the legend of the American ‘dust bowl’ was born.
Other wheat-producing countries were battered too. The depression hit the whole world. Even Germany was grievously affected, despite having imposed a 100% tariff on wheat imports the previous summer.
Stalin’s wheat, one of the Great Depression’s major causes
The world economy was so much more dependent upon agriculture in those days – farmers went broke, banks went bust, while the world sank ever deeper into depression.
Like to know more about the German involvement in this major cause of the Great Depression?
Read Wikipedia’s Soviet-German Relations before 1941 under the subheading ‘Relations in the 1920s’