Schnurre in Moscow — the Commercial Agreement

The German-Soviet Pact of 23 August 1939 has a discreet economic component: Berlin and Moscow undertake commercial exchanges to circumvent the British naval blockade. On 19 August 1939, a first agreement of 200 million Reichsmarks over seven years is concluded. But Hitler considers this agreement insufficient after the Polish defeat: the Reich's war economy needs far more.

On 25 October 1939, Karl Schnurre, economic adviser of the Political Department of the German Foreign Ministry, is sent to Moscow as chief negotiator. His mission: to obtain from the USSR deliveries of raw materials vital to the German war effort — oil (the Reich consumes 5.5 million tons a year, produces four million, imports 1.5), manganese (special steels), chromium (armour), wheat, natural rubber, wood. In exchange Germany will deliver precision machine tools, chemical products, military equipment and industrial patents. On paper, an exchange of symmetrical value.

The negotiations promise to be long, for Stalin practises a steady blackmail: he progressively raises his demands on the German counterparts. Schnurre reports to Berlin that "Stalin treats the negotiations like a bazaar haggle." The underlying question remains entirely open: how far can Berlin let the Reich depend on a single, ideologically hostile supplier for its critical resources, rather than preserving its diversification or its autarky?