Moscow Gold - Use of The Deposit

Use of The Deposit

Negrín signed 19 consecutive sell orders between February 19, 1937 and April 28, 1938, directed to the successive People's Commissioner of Finance: G.F. Grinko (until May 1937), V. Tchoula (until September 1937) and A. Zverev (until the end of the war). In them, the value of an ounce of gold troy was converted into pounds sterling, U.S dollars or French francs according to the exchange rate at the London Stock Exchange. According to Martín Aceña, 415 tonnes of crude gold (374 tonnes of fine gold) were sold in 1937, then between January and April 1938 another 58 (52) were sold, and out of the remaining gold, 35 (31) tonnes were separated from the original deposit to constitute a second deposit that guaranteed a credit of 70 million U.S. dollars. Thus, by August 1938 a remaining 2 tonnes were still available. The Republic obtained from the selling of the gold a total of 469.8 million U.S. dollars, 131.6 of which remained within the USSR to pay for various purchases and expenses. The Soviets kept 2.1% of the funds in the form of commissions and brokerage, and kept an additional 1.2% in the form of transport, deposit, melting, and refining expenses: in total, slightly less than 3.3%, approximately 14.5 million U.S. dollars. The remaining 72%, 338.5 million U.S. dollars worth, was transferred to the Banque Commerciale pour L'Europe du Nord, or Eurobank, in Paris, the Soviet financial organization in France, property of the Gosbank, the national bank of the Soviet Union. From Paris, agents of the Treasury and diplomatic representatives paid for the purchase of matériel acquired in Brussels, Prague, Warsaw, New York and Mexico, among others.

With the Spanish gold deposited in Moscow, the Soviets immediately demanded from the Republican government payment for the first deliveries of war supplies, which had apparently arrived as a gift to combat international fascism. Stashevski demanded from Negrín US$51 million in accumulated debt and expenses for the transport of the gold from Cartagena to Moscow. On the Nationalist side, German and Italian aids also had to be compensated; however, the Germans and Italians allowed Franco to satisfy his debt once the war came to an end. Authors such as Guillermo Cabanellas, Francisco Olaya Morales, and Ángel Viñas criticized the actions and behaviour of the Soviets:

The Soviet Union offers its aid to the Republicans, but demands that the payment be immediate. All idealism is thereby shattered. Russia has placed its eye on the accumulated reserves on the basements of the Bank of Spain (...) Russia established a commercial contract in which one of the parties fixed unfair conditions on the other. The Soviet Union delivered, at a high price, war material that, after all, would serve the Russians to test their effectiveness.

Historians that have had access to the "Negrín dossier" believe that the Soviets did not abuse their position nor did they defraud the Spanish in their financial transactions. Nevertheless, in the words of María Ángeles Pons: "nothing did the Republicans obtain for free from their Russian friends", as all types of expenses and services had been charged to the Government of the Republic. However, authors such as Gerald Howson believe in the existence of a Soviet fraud in the management of the deposit in Moscow, claiming that Stalin intentionally inflated the price of the matériel sold to the Republic by manipulating the exchange of Russian rubles to U.S. dollars and of U.S. dollars to Spanish pesetas, raising the international exchange rates up to 30% and 40%.

The increased power of the communists at the time, taking advantage of the political pressure that the Soviet Union could exert having control of the gold, is occasionally mentioned among scholars. According to José Giral, even though the payments for arms and weapons had been fulfilled, the Soviet Union would not send any supplies if the government of the Republic "did not agree to first appoint important communists to police and military positions."

Ángel Viñas reached the conclusion that the gold deposits were exhausted less than a year before the end of the Civil War, being spent entirely on payment for matériel (including the costs of the operation). However, authors such as Martín Aceña and Olaya Morales criticize Viñas' hypothetical models, which in their opinion lack the evidence to fully validate them, therefore it is impossible for the time being to affirm whether Viñas' conclusion is accurate or not. If, in fact, the gold deposits were entirely sold to the Soviet Union, the fate of all the funds generated by the selling of the gold and transferred to the Banque Commerciale de l'Europe du Nord in Paris, remains uncertain, as no documents have been found, neither Soviet nor Spanish, in reference to such operations. According to Martín Aceña, "the investigation on the gold has not been fully closed." In any case, with the gold depleted, the scarce credit of the Republican Ministry of Finance vanished.