In this short excerpt Carr describes the speedy development of close links between the young Bolshevik regime and Western capitalist powers.
This included the supply of weaponry to the German Army at a time when it was crushing uprisings of communists and workers (for more on the Bolshevik relationship with the German military see;
The strengthening of party and Soviet organization was matched by a consolidation of Soviet relations with the outside world. Even in the days of war communism, when thoughts of world revolution were uppermost in Moscow, the rare opportunities of direct contact with the governments of western countries were not neglected. In January 1920 representatives of the Russian cooperatives in Paris discussed with representatives of Western governments the resumption of an exchange of goods with Soviet Russia; and Litvinov in Copenhagen negotiated an agreement for the mutual repatriation of prisoners. A treaty of peace with Estonia was signed on February 2, 1920; and Lenin commented that "we have opened a window on Europe, which we shall try to utilise as extensively as possible". At the party congress in March 1920 Lenin spoke of the need "to manoeuvre in our international policy". A few days later Krasin, the one leading Bolshevik who had foreign industrial and commercial experience, set out with a large delegation of "trade experts" for Scandinavia, and in May was politely received in London. These overtures were cut short by the Polish war, which inspired a recrudescence of revolutionary hopes in Moscow and a fresh outbreak of apprehension and animosity in the west. But by the autumn of 1920 peace was restored. A Russian trading company was registered in London under the name Arcos (All-Russian Cooperative Society) ; and Krasin spent most of the winter in London negotiating with the British Government and with firms interested in orders for Soviet Russia. Finally, just a week after Lenin had introduced NEP to the party congress in Moscow, an Anglo-Soviet trade agreement was signed in London on March 16, 1921.
The trade agreement was rightly hailed as a break-through and a turning-point in Soviet policy. The parties agreed to put no obstacles in the way of trade with one another, and, in default of formal diplomatic recognition, to exchange official trade representatives. The most important clause from the British point of view was one in which each party undertook to "refrain from action or undertakings" and from "official propaganda, direct or indirect", against the other. "Action or propaganda to encourage any of the peoples of Asia in any form of hostile action against British interests or the British Empire" was specially mentioned. A pledge to refrain from hostile propaganda had been given in a less elaborate form in the Brest-Litovsk treaty. But the circumstances were different. That treaty had been concluded in conditions which Were not expected to last, and did not last. The Anglo-Soviet agreement was designed, like NEP, "seriously and for a long time". It heralded a change of emphasis in Soviet policy. Pronouncements about world revolution continued to be made, but were consciously or unconsciously regarded more and more as a prescribed ritual, which did not affect the normal conduct of affairs. The latent incompatibility between the policies of the People's Commissariat of Foreign Affairs (Narkomindel) and of Comintern began to come to the surface.
The background of the Soviet rapprochement with Great Britain was economic: desire to facilitate mutually profitable trade. The background of the rapprochement with Germany was primarily political, being rooted in common opposition to the Versailles treaty and common antipathy to the claims of Poland. Radek, who spent most of 1919 in prison or under house-arrest in Berlin, contrived to make contact with Germans from many different milieux, to all of whom he preached the virtues of German-Soviet cooperation. Official German-Soviet relations had been severed since the assassination of the German Ambassador in Moscow in 1918. In the summer of 1920 a Soviet representative was once more received in Berlin, and a German representative in Moscow. The Polish war gave a powerful stimulus to friendly relations between Poland's two neighbours. Trotsky was reported to favour an agreement with Germany; and Lenin in a public speech in November 1920 noted that, "though the bourgeois German Government madly hates the Bolsheviks", nevertheless "the interests of the international situation are pushing it towards peace with Soviet Russia against its will". Soviet policy was still ambivalent, being divided between the pursuit of revolution and diplomacy. On March 17, 1921, the German Communist Party began an armed rising against the government, known in party history as the "March action". The enterprise was certainly supported, perhaps prompted, by Zinoviev and Comintern officials; the involvement of the other Soviet leaders, heavily preoccupied at the moment by the Kronstadt revolt and the party congress, is doubtful. But the defeat of the German rising must have further diminished the waning hopes in Moscow of revolutions in the west, and strengthened the hand of those who saw a diplomatic accommodation with the capitalist countries as the immediate goal.
A feature of German-Soviet relations at this time was the quest for military collaboration, arising out of the prohibition under the Versailles treaty on the manufacture of armaments in Germany. In April 1921 Kopp, the Soviet representative in Berlin, after secret discussions with the Reichswehr, brought hack to Moscow a scheme for the manufacture in Soviet Kussia by German firms of guns and shells, aeroplanes and submarines. The response was favourable, and a German military delegation visited Moscow during the summer. An agreement was clinched at meetings in Berlin in September 1921 at which Krasin and Seeckt, the head of the Rcichswehr, were the principal negotiators; it seems to have been at this moment that Seeckt first divulged to the civilian German Government what was on foot. The submarine project was dropped. But German factories in Soviet Russia were soon engaged in the production of guns, shells and aeroplanes. Tanks were added to the programme; and experiments were conducted in gas warfare. The products of these enterprises were supplied both to the Reichswehr and to the Red Army. Later German officers trained Red Army personnel in tank warfare and in military aviation. These arrangements were veiled in the utmost secrecy. No mention was made of them in the Soviet press; and they were for a long time successfully concealed from the German public and German politicians, as well as from the western Allies. It was a far cry from the days when, on the morrow of the revolution, the Bolsheviks had denounced the secret treaties concluded by the Tsarist government with the Allies during the war. Meanwhile, German-Soviet economic relations were cemented by the setting up of "mixed companies" and the granting of "concessions" in Soviet Russia to German firms.
Early in 1922 both the Soviet and the German Governments were invited to attend an international conference, which met at Genoa on April 10. The conference was a bold attempt by Lloyd George, its most active promoter, to re-forge links with Germany and Soviet Russia, hitherto outcasts from the European community. Lenin greeted the invitation with guarded enthusiasm. "We go to it", he explained, "as merchants, because trade with the capitalist countries (so long as they have not altogether collapsed) is unconditionally necessary for us, and we go there to discuss ... the appropriate political conditions for this trade". Chicherin, Krasin and Litvinov led the Soviet delegation, the first of its kind to attend an international conference on equal terms with the delegations of other major Powers. The conference was a failure, partly owing to unyielding French opposition to Lloyd George's aims, partly owing to the inability of British and Soviet negotiators to reach agreement on the question of Soviet debts and liabilities. The Soviet Government was ready in principle to recognize pre-war debts (though not the war debts) of the former Russian Government, but only provided a substantial foreign loan were granted to facilitate their settlement. The Soviet Government refused to rescind decrees nationalizing foreign enterprises, but was prepared in certain conditions to allow foreign firms to re-occupy their former enterprises in the guise of "concessions". No amount of ingenuity could bridge these gaps.
The deadlock in negotiations paradoxically produced the only concrete result of the conference. For some time, Soviet and German diplomats in Berlin had been discussing the terms of a political treaty. The Soviet delegation at Genoa, having failed to make any impression on the western Allies, now pressed the German delegation, headed by the Foreign Minister, Rathenau, to complete and sign the treaty forthwith; and the German delegation, equally disillusioned by the proceedings of the conference, agreed. The treaty was signed, hastily and secretly, at Rapallo on April 16, 1922. The contents of the Rapallo treaty were not remarkable. The only operative clauses provided for a mutual renunciation of financial claims, and the establishment of diplomatic and consular relations. But, as a demonstration of solidarity against the Western Allies, it shattered the conference, and made a lasting impact on the international scene. Soviet Russia had secured for herself a bargaining position among the European Powers. Manoeuvres originally conceived as expedients to tide over a crisis were becoming accepted procedure.
Source; E.H. Carr - The Russian Revolution - from Lenin to Stalin 1917-1929; MacMillan, UK, 1979 - pp. 42-46.