It can be assumed that the present crops are not greater than in the pre-World War I period, despite an expansion of the cultivated areas * * * The grain surplus of Russia is decisively determined not by the size of the crop but by the level of domestic consumption. Even a small decrease of 30 kgms. per person of the population (220 kgms. instead of 250 kgms.) and a decrease of the ration for horses of 25 will create an export surplus equalling almost the amount prevailing in peace-time.
This fact is the key upon which our actions and our economic policy must be based.
For:--
a. Doubtless, war activities will decrease production in the beginning and possibly -- depending upon the amount of destruction -- for many years. An increase in production will require years.
b. Since Germany and Europe, respectively, require surplus under all circumstances, the consumption must be decreased correspondingly. The examples given above show the extent to which the amount of surplus can be increased by a limitation of consumption.
c. Such a decrease of consumption, contrary to the territories so far occupied, is feasible here because the principal food surplus area is clearly separated from the principal deficit area. Contrary to territory under the General Gouvernement, the Protectorate, France and Belgium, here no mixture of deficit and surplus areas such as would prevent a seizure due to black market, or direct contacts between producer and consumer.
The surplus territories are situated in the black soil district (that is, in the south and south-east) and in the Caucasus. The deficit areas are principally located in the forest zone of the north.
Therefore, an isolation of the black soil areas must in any case place greater or lesser surpluses in these regions at our disposal.
The consequences will be cessation of supplies to the entire forest zone, including the essential industrial centers of Moscow and St. Petersburg.
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1. All industry in the deficit area, particularly the manufacturing industries in the Moscow and Petersburg regions as well as the Ural industrial region, will be abandoned. It may be assumed that these regions today absorb an annual 5-10 million tons from the food production zone.
2. The Trans-Caucasian oil district will have to be excepted, although it is a deficit area. This source of oil, cotton, manganese, copper, silk and tea must continue to be supplied with food in any case, for special political and economic reasons.
3. No further exceptions with a view to preserving one or the other industrial region or industrial enterprise must be permitted.
4. Industry can only be preserved insofar as it is located in the surplus region. This applies, apart from the above-mentioned oilfield regions in the Caucasus, particularly to the heavy industries in the Donets district (Ukraine).
Only the future will show to what extent it will prove possible to maintain in full these industries, and in particular the Ukrainian manufacturing industries, after the withdrawal of the food surpluses required by Germany.
The following consequences result from this situation, which has received the approval of the highest authorities, since it is in accord with the political tendencies (preservation of the "small" Russians, preservation of the Caucasus, of the Baltic provinces, of White Russia to the prejudice of the Great Russians):
I. For the forest belt
a. Production in the forest belt (the food-deficit area) will become "naturalized," similar to the events during the World War and the Communistic tendencies of the war, etc., viz: agriculture in that territory will begin to become a mere "home production." The result will be that the planting of products destined for the market such as, in particular, flax and hemp, will be discontinued, and the area used therefor will be taken over for products for the producer (grain, potatoes, etc.) Moreover, discontinuance of fodder for that area will lead to the collapse of the dairy production and of pig-producing in that territory.
b. Germany is not interested in the maintenance of the productive power of these territories, except for supplying the troops stationed there.
The population, as in the old days, will utilize arable land for growing its own food. It is useless to expect grain or other surpluses to be produced. Only after many years can these extensive regions be intensified to an extent that they might produce genuine surpluses.
The population of these areas, in particular the urban population, will have to face most serious distress from famine. It will be necessary to divert the population into the Siberian spaces. Since rail transport is out of the question, this too, will be an extremely difficult problem.
c.
In this situation, Germany will only draw substantial advantages by quick, non-recurrent seizure, i. e. it will be vitally necessary to make the entire flax harvest available for German needs, not only the fibers but also the oleaginous seed.
It will also be necessary to utilize for German purposes the livestock which has no fodder base of its own, i. e. it will be necessary to seize livestock holdings immediately, and to make them available to the troops not only for the moment, but in the long run, and also for exportation to Germany. Since fodder supplies will be cut off, pig and cattle holdings in these areas will of necessity drastically decline in the near future. If they are not seized by the Germans at an early date, they will be slaughtered by the population for its own use, without Germany getting anything out of it.
* * *
It has been demanded by the Fuehrer that the reduction in the meat ration should be made good by the fall.
This can only be achieved by the most drastic seizures of Russian livestock holdings, particularly in areas which are in a favorable transport situation in relation to Germany * * *
In respect of flax cultivation, too, the German economy will be interested in these territories. On the other hand, if at all possible, it must be attempted to treat these territories leniently, for political reasons: the conflict between White Russians and Lithuanians on one hand against Great Russians on the other. Only the future will show to what extent this is possible.
* * *
In future, Southern Russia must turn its face towards Europe. Its food surpluses, however, will only be paid for if it purchases its industrial consumer goods from Germany, of Europe. Russian competition from the forest zone must therefore be abolished.
It follows from all that has been said that the German administration in these territories may well attempt to mitigate the consequences of the famine which undoubtedly will take place, and to accelerate the return to primitive agricultural conditions. An attempt might be made to intensify cultivation in these areas by expanding the acreage under potatoes or other important food crops giving a high yield. However, these measures will not avert famine. Many tens of millions of people in this area will become redundant and will either die or have to emigrate to Siberia. Any attempt to save the population there from death by starvation by importing surpluses from the black soil zone would be at the expense of supplies to Europe. It would reduce Germany's staying power in the war, an would undermine Germany's and Europe's power to resist the blockade. This must be clearly and absolutely understood. The manufacturing industries in Belgium and France are much more important for Germany and the German war effort than those in Russia. It is therefore much more essential to safeguard food supplies to those countries through surpluses from the East than to make an ambitious attempt to preserve Russian industry in the food-consuming zone. One must always bear in mind that the Great Russian people, whether under Tsarism or Bolshevism, is always an irreconcilable enemy not only of Germany, but also of Europe.
From this it also follows that there can be no question of introducing marketing regulations or food rationing in these territories. Rationing would establish a claim against the German administration on the part of the population, and such a claim must be rejected beforehand.
* * *
In conclusion, the principles must be pointed out once more: under the Bolshevik system Russia has, purely out of power motives, withdrawn from Europe and thus upset the European equilibrium based on division of labor. Our task is to re-integrate Russia with the European division of labor, and it involves, of necessity, the destruction of the existing economic equilibrium within the Soviet Union.
Thus, it is not important, under any circumstances, to preserve what has existed, but what matters is a deliberate turning away from the existing situation and introducing Russian food resources into the European framework. This will inevitably result in an extinction of industry as well as of a large part of the people in what so far have been the food-deficit areas.
It is impossible to state an alternate in sufficiently hard and severe terms.
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